Outotec
Sustainability
Report 2016
Resource efficiency
to the forefront
Contents
YEAR 2016
3 CEO’s message
5 This is Outotec
6 Our strategy
7 Sustainability highlights in 2016
8 Direct and indirect financial impacts
OUR AGENDA
10 Impacts of megatrends on our business
12 Most significant topics
13 Sustainability Agenda 2020
14 Resource efficiency to the forefront
16 Commitment to SDGs
17 Engaging with stakeholders
REVIEWING OUR PERFORMANCE
20 Safety – our number one priority
21 Safe products for our customers
22 Sustainable offering for customers
24 Responsible business practices
27 Building a sustainable supplier base
28 Enhancing employee engagement
Cases
30 Optimal water management for mines
31 Innovation for nutrient recycling
32 Flotation retrofit boosts performance
Sustainability Master Class
GRI AND DATA
34 About this report
35 Annual targets
38 Data collection
38 Economic data
39 Environmental data
44 Social data
49 GRI, GLOBAL COMPACT AND SDG CONTENT INDEX
55 INDEPENDENT ASSURANCE
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OUTOTEC / SUSTAINABILITY REPORT 2016
CEO’S MESSAGE
More from less with
Outotec’s expertise
I have met many of Outotec’s customers since
taking on the position of CEO in October,
and issues concerning productivity improvement come up in almost every conversation.
Our customers often want also to discuss
the challenges they face relating to the use
of raw materials and energy, the need to reduce emissions, and water management, for
example. In such contexts I am very happy
to hear them describe Outotec as an expert
high tech company that can offer sustainable, resource-efficient solutions to improve
their productivity and profitability. In addition
to investment costs, the entire life-cycle costs
of facilities are now receiving more and more
attention.
Outotec’s extensive positive ecological
handprint is created when our customers use
the environmentally preferable technologies
and solutions we have developed. The negative impacts of our own operations – our own
ecological footprint – are considerably smaller than this handprint.
In 2016, Outotec earned one of the top positions in the Corporate Knights’ index of the
Global 100 most sustainable companies for
the second time. This is welcome recognition
of the work we do and the results we have accomplished.
MORE EFFICIENT METAL RECOVERY
As the metal content of mined ores decreases, and since in many places the best mineral deposits have already been exhausted, resource efficiency and recycling are taking on
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OUTOTEC / SUSTAINABILITY REPORT 2016
an ever more important role. Much has been
done in these areas, but many opportunities
still exist.
In addition to the solutions needed in primary production, Outotec has the top class
expertise and technology to enable the effective use of materials extracted earlier, such
as tailings, side streams and slag. This can
result in more valuable materials, less waste
and better efficiency.
Our work with our customer AMG in Brazil provides a good example of this. Outotec helps AMG to process tailings and extract
previously unutilized lithium from them.
Lithium is a very important metal, for instance in the manufacture of batteries.
In many countries investments are currently being made in sulfuric acid plants. The
sulfur dioxide created during metallurgic
smelting processes can be almost fully recovered and transformed into sulfuric acid. Each
new sulfuric acid plant is a very positive thing
for the environment, as well as for all the
people involved.
WATER – A UNIQUELY
PRECIOUS RESOURCE
The poor availability of process water and
the insufficient quality of untreated water are
problematic in many areas. In some locations
fresh water must be created by extracting the
salt from seawater, which is an expensive process. Outotec has a wealth of experience in
solutions enabling the purification and recycling of process water.
CEO’S MESSAGE
RECYCLED PHOSPHORUS
FOR FERTILIZER USE
Phosphorus is a vital fertilizer for agriculture,
but global phosphorus reserves are dwindling. The recovery and recycling of phosphorus is an important new area for Outotec. In
a pilot facility in Skellefteå, Sweden, for instance, sludge from municipal sewage is efficiently dried using our technology, after which
the remaining solid matter is used to produce
energy applying fluidized bed technology. Detrimental elements can then be removed from
the resulting ash, enabling the remaining ash,
which is rich in phosphorus, to be used as a
fertilizer.
CO2 EMISSION REDUCTIONS
ON THE AGENDA
The Paris Climate Agreement has drawn the
world’s attention to carbon dioxide emissions.
For Outotec, this is a business opportunity –
after all, our technologies are widely known
for minimizing environmental impacts.
The steel industry is actively striving to reduce emissions around the world, with help
from Outotec. Completely CO2-emission-free,
hydrogen-based direct reduction is a technological vision that could reshape the industry’s
future. However, getting there will require extensive development work.
PROFITABILITY AND
DIVERSITY AT OUTOTEC
2016 was a challenging year for Outotec. Although order volumes in our Minerals Processing segment began to grow, and profitability was good thanks also to cost savings;
order volumes in the Metals, Energy & Water
segment remained weak, and results were
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OUTOTEC / SUSTAINABILITY REPORT 2016
negative. We were therefore forced to cut
down our expenses, reduce 650 jobs, and continue cost saving actions.
Our focus was on improving profitability
and clarifying our modes of operation. Despite
many challenging years, our personnel and
our investors have shown great commitment
to the company.
We are now building the future. This involves striving to serve our customers even
better, and develop our service portfolio with
our new Services business unit, which begins
its operations in April 2017. Our task is to give
our customers insights into new possibilities,
and to keep one step ahead.
Our skilled and talented people are motivated by success. Excellence in workplace
safety is an example of what we can achieve
by working together. In our project site at an
ilmenite smelter in Jazan, Saudi-Arabia, for
instance, more than 11 million hours have
now been worked without any accidents resulting in sick leave.
I place great importance on promoting
diversity and equality. More than 60 different nationalities are represented in our personnel. We strive to promote teamwork that
brings together colleagues from different
parts of the world. We have also set a goal to
increase the share of women in management
positions.
WORKING TOWARDS THE UN’S
SUSTAINABLE DEVELOPMENT GOALS
Outotec is committed to support and implement the principles of the UN Global Compact concerning human rights, working life,
environmental affairs, and anti-corruption.
Through our own actions the company also
supports the realization of the UN Agenda
2030, which promotes sustainability. The UN
aims for development that takes into account
the environment, the economy, and people in
a balanced way. I hope you will enjoy reading
more in this report about how our goals are
linked with those of the UN.
Finally, I would like to sincerely thank
our personnel, our investors, our customers
and our partners for their commitment to
Outotec, and for the valuable feedback we
have received through various forums. This
greatly helps us to further develop our company – with the sustainable use of natural resources as our common goal.
Markku Teräsvasara
President and CEO
This is Outotec
Outotec designs and delivers sustainable
technology and service solutions for
processing minerals and metals, for water
treatment, and for producing energy from
biomass and wastes. The company has a
strong position along the entire value chain
from ores to metals.
Outotec’s unique position at the forefront of
the mineral processing and metallurgical industry is founded on a century of scientific
knowledge and operational experience, which
have resulted in a wide range of applications,
particularly for processing virtually all types of
ores and minerals.
Our customers include businesses who
are investing in new processing plants or
modernizing their existing plants to increase
the profitability of their operations, improve
their resource efficiency, or reduce their
emissions, energy consumption or fresh water use. In line with our mission targeting the
sustainable use of Earth’s natural resources, Outotec works to optimize customers’ return on investment with minimal ecological
impact. The innovative research done at our
in-house R&D centers and our continuous
development work realized together with our
customers have made us the leading developer of technology in our field.
Outotec operates globally, with offices or
operative units in 34 countries, including our
headquarters in Finland. We sell products and
services to over 80 countries. Our customer
centers provide full support for our customers’ businesses – both in the everyday running
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OUTOTEC / SUSTAINABILITY REPORT 2016
of their operations and when they make new
investments. Our two business units – Minerals Processing; and Metals, Energy & Water
– are dedicated to the creation of sustainable
technology solutions and life-cycle services
for our customers. As of April 1, 2017, a third
business unit, Services, will focus on developing our service offering and competences
as well as delivering services for our customers. Our product portfolio covers hundreds of
various plant concepts, processes, pieces of
equipment and services.
Outotec has been listed on the NASDAQ
Helsinki since 2006, and the company was
rated in the Mid Cap category in 2016. There
were no major changes in Outotec’s company
structure or the ownership during 2016.
Read about Outotec’s financial performance, legal entities and shareholders in our
Financial Statements 2016 at
www.outotec.com/investors.
We create a significant
positive handprint
Key figures
2016
2015
2014
Sales, EUR million
1,058
1,201
1,403
-23
56
56
55
61
57**
Adjusted operating profit*, EUR million
R&D expenses, EUR million
Priority applications
Average number of employees
57
93
62
4,344
4,855
4,845
Employee engagement index, %
42
56
-
Wages and salaries, EUR million
329
353
363
Share of environmental goods and services in order intake, %
GHG emissions avoided through the use of Outotec technologies,
thousand tonnes of CO2e
Lost time injury rate (LTIR) per 1 million working hours
Total GHG emissions, tonnes of CO2e per EUR 1 million sales
Total energy consumption, TJ
90
90
90
5,870
5,469**
5,067**
1.8
2.8
1.5
24.7
28.2
24.8
165.5
164.5
152.9
*) excluding restructuring and acquisition-related costs and purchase prize allocation amortizations
**) restated figure
Our strategy
Outotec’s strategy is to provide customers
with the best tools for improving their
productivity, by using our leading
technologies combined with life-cycle
services that enhance the performance of
our customers’ plants and processes.
With our mission aiming for the ‘sustainable use of Earth’s natural resources’ we strive
to meet our customers’ needs and priorities.
While safety has long been a top priority for
our industry, environmental performance and
social license to operate are also increasingly
at the forefront of our customers’ minds, not
least because of tightening regulation.
As countries start implementing the Paris
climate agreement, we expect carbon emission controls to start playing an increasing
role in addition to existing stringent restrictions on emissions of harmful substances to
air or water. These trends, coupled with a prolonged decline in the industry’s productivity,
as well as declining ore grades, all mean that
there is a clear market for a premium technology provider like Outotec.
In 2016, we also defined our own strategic approach to climate change, which will
henceforth be an important part of Outotec’s
wider strategy.
We have led the industry in terms of environmental efficiency in most of the markets we serve for decades – with many of our
products being industry benchmarks. We now
increasingly need to develop digital offerings
to further improve productivity. Together with
our customers we are already realizing several interesting related pilot projects. Building
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OUTOTEC / SUSTAINABILITY REPORT 2016
up these strengths requires broad expertise,
so we must purposefully hire and retain people with the right process knowledge.
CHALLENGES – IMPROVING COST COMPETITIVENESS AND EXPANDING SERVICES
One current challenge is the subdued level of
investment in our industry, coupled with increased competition. After a prolonged mining and metals boom, which lasted until 2012,
we have seen investment levels coming down,
finally leveling off and turning upwards during
2016, but current levels are still low. At the
same time, the recent boom encouraged several new competitors to enter our markets. In
tighter markets, customers typically prioritize
upfront CAPEX costs and payback times rather than full life-cycle costs, where we have
our competitive edge.
As is typical for cyclical industries, lowered investment levels have had a significant
impact on our profitability. We have recently had to adjust our operating model and resourcing accordingly. In December 2016, we
finalized a new EUR 70 million cost structure
program, which led to a reduction of 650 employees globally.
GOING INTO THE NEXT CYCLE, WE HAVE
FIVE STRATEGIC FOCUS AREAS
1)Customers
Due to increased competition, we need to
act in a customer-centric way to differentiate. This requires developing our own
competences to even better understand
our customers’ needs, by ensuring that
we measure and actively manage customer satisfaction. It also means improving
our responsiveness and focusing on businesses, specific projects and geographies
where we can really make a difference for
our customers.
2) Service business
Reigniting the growth of our service business is the key to achieving profitability
over the cycle. Our services are based on
our technological knowledge. They span
from spare parts and technical maintenance services through to plant shutdowns and full scale modernizations.
Outotec has a very long history, and with
thousands of plants and pieces of equipment delivered to customers worldwide,
our own installed base is our primary focus. At the same time, as technologies
have evolved, we still have work to do to
productize our offerings, so as to improve
responsiveness and achieve economies
of scale. Our newly established Services
business unit, due to start up on April 1,
2017, is being shaped to provide sufficient
management focus for developing our
service offering and delivering the growth
necessary to improve our profitability and
customer intimacy.
3) Competitiveness of our products
With fewer opportunities in the market, competition is fierce. We have two
primary methods of improving our
competitiveness:
a) further differentiation through digitalization and improvements in energy and
environmental performance with a specific focus on carbon emissions, for instance;
b) reductions in product costs, which
can be achieved by redesigning products
specifically to reduce sourcing costs, by
changing components without compromising on quality, and by searching for
lower cost supply alternatives.
4)Profitability
We have taken stringent action in recent
years to improve our fixed cost efficiency, leading to significant improvements.
We now aim to continue spreading a cost
conscious attitude within our company, so
as to limit fixed cost increases as much as
possible as volumes start to grow.
5) Our people
Since we are an expertise-based company, people are our most valuable asset. In
recent years we have unfortunately seen
a dip in our employee satisfaction and engagement. We are working to fix this firstly by creating a clearer organization to enable people to work more effectively. We
are also examining our leadership culture.
This involves stepping up internal job rotation further and promoting more open and
transparent decision-making. The safety of our employees has long been a top
priority, and we are able to show ever-improving results on that front.
Read also about long-term financial targets,
page 13.
Sustainability
highlights in 2016
Q1
Jan 21
Outotec ranked the world’s 3rd most
sustainable company on the Global
100 index of Corporate Knights
Q2
Mar 11
Mar 29
Apr 7
May 4
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OUTOTEC / SUSTAINABILITY REPORT 2016
Q4
New strategic technology
development partnership launched
with Newcrest Mining
Customer award received from
Ma’aden Phosphate Company for
our support work and high customer
communications standards
Working for resource efficiency –
Outotec’s sustainability report 2015
published
Outotec’s DeBugger technology
won the first place in the Nutrient
Recycling Challenge in Helsinki,
Finland
May 18
Students from Central South
University in China granted
sustainability awards by Outotec
May 27
Employee engagement pulse
survey run
Jun 7
Outotec’s Capital Markets Day
held in Outotec House
Jun 22
Markku Teräsvasara appointed as
Outotec’s new CEO
Q3
Jul 15
Health, Safety and Environment
Award received for our
Cajamarquilla Project in Peru
Jul 18
Outotec awarded by Hydro Alunorte
for achieving 1.3 million work hours
with zero accidents in a red mud
filtration project
Sep 7
Sep 15
30th anniversary meeting of the
Chinese-Finnish Joint Working
Group for Non-Ferrous Metals
Industry hosted by Outotec
New partnership signed by Outotec
and Thermo-System to deliver
thermal processing solutions for the
nutrient recycling
Oct 10
Outotec celebrated 10 years as an
independent company, publishing
a history book 150 years’ evolution
towards a greener future - the
Outotec story
Oct 20
Customer seminar on sustainable
mining and metallurgy held in
Mongolia
Nov 2
Internal workshop held on
Sustainable Development Goals
(SDG) related to Outotec’s business
Dec 12
Sustainability Master Class
launched in cooperation with the
University of Helsinki
Dec 20
Outotec announced lower
profitability guidance for 2016
Dec 30
EUR 70 million cost structure
program completed, resulting in the
reduction of 650 jobs globally
Direct and indirect
financial impacts
Our long-term financial targets involve
profitability and continuous growth. The
challenging market environment in 2016
has, however, weakened our financial
performance. We strive for transparency in
our operations, and we base our decisions
on sound business reasons and commercial
rationale.
Outotec’s approach to economic sustainability is demonstrated by our long-term financial
targets involving profitability and continuous
growth. Our approach is also reflected in our
three material themes:
•
•
•
Responsible business practices
Sustainable supply chain
Stakeholder dialogue
DIRECT ECONOMIC VALUE GENERATED
AND DISTRIBUTED
Outotec’s financial performance deteriorated
in terms of order intake, sales and profitability in 2016. Our order intake in the Minerals
Processing segment started to increase from
the second quarter, which together with related cost savings contributed to the segment’s
good profitability. Our Metals, Energy & Water segment’s order intake remained weak,
however. A lack of major orders and increased
risk provisions especially in one large project
significantly weakened the segment’s result.
To adapt our operations to the weak markets, Outotec launched a new cost structure
program in November 2015, aiming to reduce
fixed costs by EUR 70 million during 2016. The
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OUTOTEC / SUSTAINABILITY REPORT 2016
targeted savings were achieved, and the program was closed in December 2016. However,
cost saving actions will continue, particularly
in the Metals, Energy & Water business unit,
to improve profitability.
The total wealth created by Outotec in
2016 was EUR 344 million (2015: 456 million)
(G4-EC1). Our total procurement spend was
EUR 714 million (746 million).
Outotec provides employment for approximately 4,200 people in 34 countries. Wages and salaries in 2016 amounted to EUR
329 million (353 million). In 2016, Outotec had
to reduce 650 jobs globally due to weakened
market situation, which had negative direct
impacts on the communities concerned.
As the company’s result before taxes was
negative, no dividends were paid to shareholders from 2015. Neither were there any
contributions to charities.
At the end of 2016, Outotec’s market capitalization was EUR 914 million (623 million).
Read also about impacts of megatrends
on our business on page 10.
INDIRECT ECONOMIC IMPACTS (G4-EC8)
As a large-scale buyer of goods and services,
we play an important role in supporting local
businesses. This generates employment and
drives socio-economic development in local
communities. In large projects, as many as several hundred local engineers and other specialists, contractors and service providers may work
for us as suppliers or subcontractors.
Outotec’s project implementation can consist of over 10 million working hours at customer’s site. Most of this work is done by local
suppliers or subcontractors. Where Outotec
has long-term service contracts with customers, maintenance and service personnel are
normally hired locally and trained for their
specific tasks after the plant has been built.
Large mines and processing plant investments – built with Outotec technology – considerably boost the development of the host
country and its economy. They may create
hundreds or thousands of new jobs, while
also leading to the establishment of new industrial plants and growth of businesses
along the value chain from natural resource
extraction to finished products. In such greenfield plant deliveries by Outotec, the indirect
economic impacts are considered significant.
In 2016, although we received fewer large
plant orders than previous years, Outotec
used approximately the same amount of subcontractors, over 2,200, working under our
supervision at the project sites.
The fact that Outotec’s financial result
was negative had indirect negative impacts
on societies in the form of less taxes paid. As
some customers postponed their new investments, there were lower local employment
rates in those locations. The reduction of 650
jobs globally by Outotec had indirect negative
impacts, which, however, were not considered
significant in any of Outotec’s locations.
80% of Outotec’s manufacturing calculated by value is sourced from external suppliers. Most of our suppliers in 2016 were based
in Finland, Germany, Brazil, Australia, and
South Africa; though Outotec has also developed best-cost-country sourcing in China, India, Eastern Europe and Mexico. Our spending
on local suppliers contributes to local employment and regional development. In 2016,
64% (43%) of our customer-related purchases
were sourced locally (G4-EC9).
R&D activities generate jobs and
enhance skills
Outotec also contributes indirectly to society
through R&D activities. Ongoing research and
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OUTOTEC / SUSTAINABILITY REPORT 2016
development activities run together with our
external partners received EUR 2.3 million
(3.0 million) in public funding. We additionally
subcontracted work packages out to universities and mainly small and medium sized enterprises for more than twice this sum (over
EUR 5 million). This generates many local
jobs, while also enhancing skills and knowledge development.
Fair and non-discriminatory tax policy
As a globally operating company, Outotec faces a variety of tax laws, regulations, practices
and interpretations. The international tax environment is sometimes challenging to navigate, but we are committed to being a responsible and compliant taxpayer in each country
where we operate. We pursue transparency
and non-discrimination in our tax practices,
and do not engage in aggressive tax planning. Our tax management has a proactive
approach.
In 2016, Outotec paid a total of EUR 6.4
million in corporate income taxes (3.3 million). The table below lists the tax rates affecting us in the countries where we were
subject to corporate income taxation in 2016.
In addition to local corporate income taxes, we pay, collect and remit many other taxes
and tax-like payments, such as value added
and sales taxes, payroll taxes and capital taxes. Our total tax contribution varies depending on the geographical distribution of sales,
which in turn is affected by our product mix
and locations of customer projects. We promote open communication with the local tax
authorities wherever we operate.
Outotec delivers large projects, and in
some countries there may be only one project ongoing. For this reason, we cannot disclose country-specific financial information
as it could breach our commitments concerning access to project-related confidential information. Also, the destinations of our sales
typically do not correspond with the places in
which the work and sales activities are performed, value created and where the income
must be reported and taxes paid. Providing
country-specific tax information would not
give a comprehensive picture of the fairness
of the tax distribution in Outotec’s case.
OUR POLICIES
• Outotec Corporate Governance Policy
• Code of Conduct
• Outotec Risk Management Policies
• Supplier Policy
• Supply Policy
• Tax Policy
Country
Effective income tax, %
Country
Effective income tax, %
Australia
30.0
Netherlands
Austria
25.0
New Caledonia
30.0
Brazil
34.0
Norway
25.0
Bulgaria
10.0
Peru
28.0
Canada
25.8
Philippines
30.0
Chile
35.0
Poland
19.0
China
25.0
Qatar
10.0
Finland
20.0
Russia
20.0
Germany
29.2
Saudi Arabia
20.0
Ghana
25.0
Serbia
15.0
Greece
29.0
South Africa
28.0
India
30.9
Spain
25.0
Indonesia
25.0
Sri Lanka
28.0
Kazakhstan
20.0
Sweden
22.0
30.0
Turkey
20.0
Mexico
Mongolia
10.0 – 25.0
United Arab Emirates
Morocco
10.0 – 31.0
20.0 – 25.0
0.0
United Kingdom
20.0
Mozambique
32.0
United States
38.0
Namibia
32.0
Zambia
35.0
Impacts of megatrends
on our business
MEGATREND
Three billion new middle-class consumers
will need vital resources such as metals
and water in the coming decades. This
makes it essential to optimize resource
usage. Greater production capacity and
more resource-efficient, sustainable
technologies will be needed. We feel that
technology can change everything.
Our management annually evaluates the
global megatrends that impact Outotec’s
business, examining related risks and opportunities to create the basis for our strategic
planning. Sustainability-related risks and opportunities are addressed in Outotec’s routine
risk management processes.
The megatrends with the greatest impact
on Outotec today, as set put below, were first
listed in our 2014 evaluation. In our 2016 review, the previously listed megatrend Decoupling wealth and ecological footprint has been
included in the Resource efficiency imperative, as they both relate to growing demand
for metals and minerals, and the excessive
resource use that is causing some of the most
serious problems in the world, such as the
climate change.
Other megatrends identified as impacting Outotec’s business are: Urbanization and
the growing middle class, the Drive for social
sustainability, the Digitalization of the world,
and a More volatile macroeconomy.
Overall, these global megatrends appear
to bring Outotec more opportunities than
threats (G4-EC2).
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URBANIZATION AND THE GROWING MIDDLE CLASS
Growing demand for minerals and metals to satisfy the needs of
the new middle class requires greater processing capacity and
more resource efficient methods.
IMPACT ON OUTOTEC ( RISKS – / OPPORTUNITIES +)
Outotec’s cost structure may be too high for emerging countries
New interest for Outotec’s technologies; efficient ore processing,
higher yields and advanced process control
Increased cost-competitiveness with modular products, local suppliers and best-cost-country sourcing
RESOURCE EFFICIENCY IMPERATIVE
Valuable metals and minerals must be more effectively recovered,
and and the tailings and the waste must be recycled and processed
better to enhance the efficient use of resources.
Ores become more complex and difficult to process
Tighter regulation affects customers’ operations
Changes in the availability or price of water, fossil fuels, power and
mineral resources affect customers’ operations
Increased demand for Outotec’s new energy and water-efficient
solutions
Increased demand for new production of metals from end-of-life
secondary materials; electronic waste, metallic scrap, cabling, and
battery paste or scrap.
Requirements for the efficient use of biomass and waste increase
DRIVE FOR SOCIAL SUSTAINABILITY
To maintain their social license to operate, our customers are paying more attention to health, safety and social responsibility with
regard to their employees and the local communities.
Customers’ disregard for social acceptability and regulation
concerning the hazardous emissions
Outotec’s strong track record as a responsible partner helps
customers gain social acceptance and financing for their projects
Possibilities for Outotec’s modern and safe technologies to solve the
environmental challenges in mining
Customer and supplier collaboration provide new possibilities for
improving the well-being of local communities
MEGATREND
DIGITALIZATION OF THE WORLD
Digitalization will impact on how business is conducted, how groups
of people function, and what we offer our customers. The world is
increasingly driven and characterized by connectivity, data, and software. Cloud computing, combining big data sets, advanced analytics
methods, new ways of interactions with machines, user experience
requirements drawn from consumer applications and autonomous
systems will also become a commonplace in our business.
IMPACT ON OUTOTEC ( RISKS – / OPPORTUNITIES +)
Increasing competition and new players breaking the traditional
market boundaries due to the development of digital services
Increasing possibilities for product and service development
New possibilities for cost-efficient, flexible and highly responsive
partnership models and closer engagement with customers
New business benefits with advanced ICT systems and data management throughout Outotec’s international network
MORE VOLATILE MACROECONOMY
Volatile investment activity rates, the speed of global GDP growth,
metal consumption rates, and the balance or imbalance between
supply and demand, capacity utilization rates and metal prices all
greatly influence Outotec’s business.
Customers minimizing or postponing investments during downtrends
Significant changes in commodity prices, currency rates or the
availability of financing
Volatile resource planning
72% of Outotec’s business comes from the cyclical mining and metals industry
Business opportunities during uptrends
Outotec’s global operations and solution offering for virtually all
types of minerals and metals reduces dependence on any single
commodity or geographical market
Outotec’s wide range of long-term service contracts balance the
risks posed by the highly cyclical markets
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Most significant topics
Based on stakeholder dialogue, and
considering the economic, environmental,
and social impacts of our operations, we
have defined nine sustainability topics that
we see as important for Outotec in relation
to risk management or value creation.
Outotec conducted a wide-ranging review of
material sustainability topics in 2014. Potential topics were first identified together with
an external partner, based on a previous materiality assessment run in 2011, as well as
management interviews, a review of sustainability trends impacting the industry, and
stakeholder feedback. Next, we mapped all of
the relevant economic, environmental and social impacts that can influence stakeholders’
perceptions of Outotec.
Our Sustainability Working Group
prioritized the identified significant topics in
a workshop, which were then validated by the
Outotec Leaders’ Forum, where about 100 of
Outotec’s leaders shared their views on the
topics. The results of the materiality assessment were also reviewed and verified by
Outotec’s Sustainability Advisory Council,
representing our key stakeholders.
Outotec’s sustainability specialists evaluated the scope and aspect boundaries for the
material topics, and chose the relevant GRI
indicators. Finally, the Executive Board validated the results of the materiality assessment in 2015.
At the end of 2016, the core team of the
Sustainability Working Group reviewed the
material aspects and related GRI indicators
against G4 guidelines. The list of material as12
OUTOTEC / SUSTAINABILITY REPORT 2016
pects was complemented, and some indicators were left out from reporting to improve
compliance with the G4 guidelines for the
‘core’ level reporting framework.
Based on the materiality assessment, the
topics that matter most for Outotec are:
1 Safety
2 Sustainable offering for customers
3 Responsible business practices
4 Sustainable supply chain
5
6
7
8
9
Development of our people
Equal opportunities and diversity
Stakeholder dialogue
Community involvement
Minimizing our own environmental impact
The first five of these nine most material topics, together with the below G4 aspects identified as material, were chosen as the most
significant issues for Outotec’s business.
These topics are all reviewed in this report.
Topics material to Outotec
G4 material aspects
Aspect boundaries
1 Safety
Occupational health and safety
Outotec’s premises and employees, Contractors working
under Outotec’s supervision, Outotec’s project sites
2 Sustainable offering for customers
Products and services, Customer health and
safety, Energy, Emissions
Outotec’s premises and employees, Outotec’s products and
services at customers’ operations
3 Responsible business practices
Economic performance, Indirect economic
impacts, Compliance, Environmental
grievance mechanisms, Labor practices
grievance mechanisms, Human rights
grievance mechanisms, Freedom of
association, Non-discrimination, Anticorruption, Anti-competitive behavior
Outotec’s premises and employees, Outotec’s products and
services, Suppliers
4 Sustainable supply chain
Procurement practices, Supplier
environment, Supplier assessment for labor
practices, Supplier assessment for impacts
on society, Child labor, Forced or compulsory
labor, Supplier human rights
Suppliers’ operations, Contractors working under Outotec’s
supervision,Outotec’s project sites
5 Development of our people
Training and education, Employment
Outotec’s employees
6 Equal opportunities and diversity
Diversity and equal opportunity
Outotec’s employees, Suppliers
7 Stakeholder dialogue
Product and service labelling, Labor/
management relations, Local communities
Outotec’s key stakeholders
8 Community involvement
Grievance mechanisms for impact on society
Outotec’s premises and employees,Outotec’s project sites,
Outotec’s stakeholders
9 Minimizing our own
Materials, Energy, Water, Emissions,
Effluents and waste
Outotec’s premises and employees, Contractors working
under Outotec’s supervision at project sites
environmental impact
Sustainability Agenda 2020
Our Sustainability Agenda is built on
the five most material topics to our
stakeholders and Outotec’s business. We
measure our sustainability performance
with regard to long-term targets set for
each theme.
We have partially revised our Sustainability
Agenda and long-term goals, as we reached
our supply chain goals ahead of time. A new
long-term target was approved by the Executive Board in February 2017. Five of the nine
most material areas remain as the building
blocks of our Sustainability Agenda: safety,
our offering, business practices, supply chain,
and our people. Our annual targets are linked
to both our long-term goals and the nine
most material topics. Based on an internal
evaluation, we have also integrated the most
relevant UN Sustainable Development Goals
into our Sustainability Agenda, as well as our
own annual targets.
DEVELOPMENT WORK DRIVEN BY LONGTERM GOALS
Safety arose as the most material theme in
our recent materiality analysis, partly as a result of deeper stakeholder dialogue, and partly because our top management saw a need
to improve our safety performance and culture. Zero accidents was set as the ultimate
high-level target for our development work,
though this is a very ambitious target that is
seldom achieved by any company. Outotec’s
management believes that this level of commitment to a safe working environment is
nevertheless a necessity in the challenging
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OUTOTEC / SUSTAINABILITY REPORT 2016
project circumstances in which our employees, customers and suppliers work.
Our technologies and R&D have a central
role in our operations, since they represent
the key means of improving the resource efficiency of of our customers’ operations. For
this reason, developing sustainable offering
for our customers is also at the core of our
sustainability work. Our second long-term
goal relates to providing customers with even
more sustainable technologies and services,
to help them reduce their ecological footprint.
The baseline year for our long-term technology-related targets is 2012.
In the area of responsible business practices, we aim to develop strong common values and a robust Code of Conduct, as well as
a solid governance structure. An integral part
of this goal is to ensure that our Code of Conduct is also implemented in accordance with
our values.
Because the majority of Outotec’s manufacturing is outsourced, sustainability along
our supply chain is highly important to us.
Global supply chain management has been a
prioritized development area for Outotec since
2010. In 2015, we defined a new long-term
goal for our supply chain: to have all our major suppliers committed to Outotec’s Supplier Policy by 2020. We reached this long-term
goal already in 2016, and have now set a new
long-term and annual target for supply chain
development and auditing.
Outotec’s business is dependent on our
people. We want to make Outotec the most
desirable place to work in our industry, and
to keep great talent with us. This means we
need to offer opportunities for continuous
professional growth through job and task ro-
We have also integrated the
most relevant UN Sustainable
Development Goals into our
Sustainability Agenda
tation. The key motivation for many experts
today is a sense of fulfillment.
As an enabling and engaging culture is a
key differentiating factor for Outotec, we aim
to achieve a five per cent improvement in the
employee engagement and performance enablement indices calculated on the basis of our
employee surveys. The figures will be compared with results from the base year 2013,
when our employee engagement index was 69
percent, and our performance enablement index was 67 percent.
We see engagement as a combination of
perceptions that have a positive impact on
behavior, such as satisfaction, commitment,
pride, loyalty, a strong sense of personal responsibility, and a willingness to be an advocate for the organization.
Another key element is performance enablement, which focuses on customer service
and quality, involvement, training and teamwork. Performance enablement is a good predictor of customer satisfaction and business
performance in the form of sales growth,
market share, productivity, and profitability. These parameters are measured at least
every second year in our employee surveys.
Our annual targets are linked to our Sustainability Agenda. We have set annual targets
for all nine identified material themes, includ-
ing for the first time the theme Equal opportunities and diversity.
LONG-TERM FINANCIAL TARGETS
In addition to the long-term goals related
to our Sustainability Agenda, Outotec aims
to achieve continuous profitable growth.
Outotec’s Board of Directors set the following
long-term financial targets for the company in
June 2016:
• Sales growing faster than the market
• Annual average service sales growth
5–15%
• Reach 10% adjusted EBIT margin by 2020
• Gearing at maximum 50%
We reached our supply chain goals
ahead of time
LONG-TERM TARGETS FOR 2020RELATED SDG
SAFETY:
Zero accidents
SUSTAINABLE OFFERING:
EGS in order intake permanently over 90%
Customers generate 20% less CO2 when using Outotec’s
metals related technologies compared to annual baselines
50% reduction in fresh water intake per tonne of ore in nonferrous metal concentrators compared to 2012
Double the energy produced through our waste-to-energy
solutions compared to 2013
RESPONSIBLE BUSINESS PRACTICES:
Strong common values and Code of Conduct;
solid governance structure
SUSTAINABLE SUPPLY CHAIN:
100% of our key suppliers audited regularly with supplier
development actions drawn up according to audit findings
DEVELOPMENT OF OUR PEOPLE:
5% improvement in employee engagement and performance
enablement indices compared to 2013
FINANCIAL PERFORMANCE:
Continuous profitable growth
14
Resource efficiency
to the forefront
OUTOTEC / SUSTAINABILITY REPORT 2016
Three billion new middle-class consumers
will need vital resources such as metals
and clean water in the coming decades. To
cope with these global challenges related
to resources, we offer technologies and
services that reduce the consumption
of energy and water by increasing
material efficiency, recycling metals and
reprocessing tailings and wastes.
Outotec’s technologies have always been
known for their resource efficiency, and this is
what gives the company its competitive edge.
In today’s market environment, characterized
by declining ore grades and increased operating costs, our customers are increasingly
emphasizing resource efficiency among their
requirements.
For this reason, Outotec is focusing more
than ever before on improving the systemic resource efficiency of its technologies,
and also to enable economically viable metal production in smaller capacity plants. Our
offering encompasses favorable solutions
for resource extraction, primary production,
the processing of secondary raw materials,
waste-to-energy schemes, and renewable energy production.
MINED METALS
Ore grades are becoming more complex and
more difficult to process. Although raw minerals are non-renewable resources, metals –
once mined and processed – are 100 per cent
recyclable. Moving towards the circular economy has two essential implications for our
industry. Primary production chains must become much more efficient; while more metals
must be recovered from residues, scrap and
products at the end of their life-cycle.
At Outotec, we have the right expertise for
both these developments. Using our technology mix and our deep knowledge, we can tailor systemic solutions to treat a wide range
of feed materials, including both primary minerals from geological mines, and secondary
materials containing minerals sourced from
urban mines. We can help our customers
to maximize metal yields by using advanced
technologies that involve digitalization, automation, closed material loops, efficient water
management and paste backfill solutions.
One of Outotec’s recent developments is
the introduction of a rigorous analysis framework of Outotec’s solutions. This framework
can be adapted to each customer’s process
requirements, enabling us to assess resource
efficiency and specific flows of raw materials, water, energy and wastes in the context
of the circular economy and and focusing
on the direct and indirect environmental impacts of Outotec’s solutions. Customers can
use this information in their decision-making, enabling them to choose the most environmentally sound option and understand the
tradeoffs between different process options.
Although mining companies typically invest
in large equipment and processing units, using the economics of scale to seek profitability and low unit costs, they are still increasingly
putting resource efficiency and environmental
sustainability high on their agenda. The current business environment does not encourage
companies to make large investments to increase their metal processing capacities.
In response to this trend, Outotec has
launched alternative, modular plant concepts.
Such plants are mainly small in scale, but at
the same time flexible and resource efficient.
Our recently launched modular solvent extraction and flotation plants are very agile.
They can easily be adjusted to various production volumes by adding further modules, and
they can also be reused in other sites with
relatively light additional structures after production ceases at their original site. Simplified design and modularization gives products
a longer life-cycle and a higher end-of-life
value.
BY-PRODUCTS
By-products from metallurgical processes,
such as minority metals, acids, salts, chemicals and slag, can be recovered to create
saleable products usable as raw materials in
other industries. Another type of by-product
is energy recovered from the processes, typically in the form of steam, which can be used
in the process itself, in other processes, or
even in electricity generation. It is essential to
find ways to use such surplus energy in order
to reach high energy efficiency. The heat generated in processes should be recovered and
used in other processing phases.
SECONDARY RAW MATERIALS
Metals are different from other materials in
that they are inherently recyclable. Metals
have already been recycled for thousands of
years. In addition to providing environmental
benefits, recycling is often also less costly.
However, the challenge of using secondary raw materials is the complexity of the
raw material, which may include a mixture
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OUTOTEC / SUSTAINABILITY REPORT 2016
Creating greater value
from less input
of alloys in different physical forms, as well
as electronics, plastics, oil, fluids, textiles,
metals, glass, sand etc. Outotec has plenty of
experience integrating several different technologies intelligently to maximize the economically viable recovery of multiple materials, and to utilize the energy contained in the
feed in the processing. In secondary smelting,
it is also essential to capture emissions generated during the process, and Outotec has
several alternatives for cleaning gases before
releasing them into the atmosphere.
WATER
Clean fresh water is a scarce resource in
many parts of the world. Demand and supply can be brought into a sustainable balance
only by changing the pattern of demand or by
introducing new sources of supply. Above all,
water losses should be minimized, and water
must be used much more efficiently.
Outotec’s solutions can optimize water management in entire mines, including
concentrator sites. The target is to minimize
fresh water consumption by implementing
water reuse, recycling and cleaning practices.
Our paste plant technology for mineral
concentrators and effluent treatment of metallurgical processes are proven solutions. Another viable solution for waste material storage is the dry stacking of concentrator sand,
which is a far safer method than the tailings
dams that are still widely used. For waste water treatment, we have developed a process
for managing sulfate, which is a common and
growing challenge in the industry.
MUNICIPAL AND INDUSTRIAL WASTES
Resources that can be recovered from municipal waste water treatment sludge include energy, a range of metals, nutrients, and other
salts and chemicals. A state-of-the-art Sewage Sludge Incineration Plant typically operates through a self-sustaining process, with
no need for adding external fuel. Such plants
can produce a surplus of heat or even electrical power or heat, and comply with all emission standards. In addition, Outotec can help
communities and companies to move on from
merely cleaning water to minimizing of wastewater streams and establishing of practical
resource recovery concepts.
A wide range of fuels, such as agricultural waste, municipal solid waste, wood waste,
industrial and municipal sludge, plastic, and
tires, may be used for energy production with
Outotec technologies. Such processes can
close critical metal and nutrient cycles by
turning waste ash into a raw material or even
a ready product such as phosphate or fertilizer.
NEW BUSINESS FROM RESOURCE
EFFICIENCY
One of the key drivers behind resource efficiency is the notion that it plays an important
role not only from an environmental perspective, but also by securing a competitive advantage.
During the prevailing market situation,
when companies are looking for all possible
ways to boost profits without making large
capital investments in new plants, we have
found new business opportunities in the quest
to improve resource efficiency. After analyzing
each link of our customers’ operations, we
can suggest services and alterations that will
improve their performance, recommending
models that include novel ways of capturing
value. Such changes can enable customers to
reduce the amounts of energy, chemicals and
other inputs they use, for instance.
Outotec is a member of many international
organizations who are working to create initiatives that can replace ‘end-of-pipe’ solutions
with more systemic processes promoting resource efficiency and clean technologies.
This report introduces several business cases demonstrating how we can help
our customers to improve their resource
efficiency.
• Optimal water management for mine
sites, page 30
• Innovative technologies for nutrient
recycling, page 31
• Flotation retrofit boosts performance
at Yamana Gold, page 32
• Sustainability Master Class, page 33
Committing to Sustainable
Development Goals
We have defined our most significant
impacts with regard to the UN Sustainable
Development Goals. Our environmentally
sound technologies can make our
customers’ operations more sustainable,
and we take action every day to combat
climate change. We have integrated the
SDGs into our Sustainability Agenda 2020
and GRI Index.
In September 2015, the United Nations
launched the 2030 Agenda for Sustainable
Development as a framework for shared action for all countries, companies, NGOs and
other stakeholders. The Agenda includes 17
Sustainable Development Goals (SDGs), which
set out a global development agenda for 2030,
with objectives for social, economic and environmental dimensions. As part of our commitment to the Agenda 2030 and the SDGs,
we have identified the most relevant goals for
us and examined our impacts on them.
DEFINING OUR IMPACTS
Outotec’s impacts on the SDGs were analyzed through an internal workshop, involving members of our extended Sustainability
Working Group. The team identified the most
important SDGs for each of Outotec’s most
material topics. The core Sustainability Working Group summarized the results based on
the aggregated outcome and voting at the
workshop. Eleven of the SDGs were identified as most relevant overall, with two SDGs
where we have indirect impact. The analysis
and approach to the SDGs were presented to
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OUTOTEC / SUSTAINABILITY REPORT 2016
the Executive Board, who approved our commitment.
OUR CONTRIBUTION
Outotec’s most significant impacts on the
SDGs are created by our technologies. By putting safety first, we reduce the risk of accidents relating to the use of our technologies.
Applying our technologies also reduces the
pollution and contamination of air, water and
soil (Goal 3).
In line with the goals set by the UN General Assembly, we upgrade our customer’s
operations to make them more sustainable
(Goal 9), while also improving energy efficiency (Goal 7), keeping resource efficiency at the
forefront. Through our offering and the development of our technologies, we support
actions to combat climate change every day
(Goal 13). We also increase the efficiency of
water use by reducing the amounts of fresh
water needed in our processes and by increasingly recycling and safely re-using water,
thus decreasing the amounts of wastewater (Goal 6). With our solutions for renewable
energy, we help to make cities more sustainable by enhancing sustainable urbanization
(Goal 11). With equal opportunities as one of
our most material topics, our sustainability
targets aim to increase women’s opportunities for leadership to promote gender equality
(Goal 5).
We also cooperate with universities on
R&D (Goal 4) and drive technological upgrades and innovations that will improve resource efficiency in production (Goal 8). By
requiring sustainable practices along our
supply chain, we promote the wider adoption
of sustainable management practices, thus
enabling our clients to use natural resources
efficiently (Goal 12). We have zero tolerance
for corruption and continuously train our own
employees on anti-corruption topics, while
also requiring compliance from our business
partners (Goal 16).
In addition to the above, we have identified
an indirect impact of our partnerships with
our customers, suppliers, and other business
partners (Goal 17) towards two SDGs in connection with our business operations. Further,
Outotec is firmly committed to the principle of
equal opportunities, and implements non-discriminatory company policies and practices
globally (Goal 10)
OUR TARGETS TOWARDS SDGS
To measure our commitment and contribution
to the SDGs, we have integrated the SDGs into
our own Sustainability Agenda. Our long-term
targets reflect our core value ‘Commitment
to sustainability’, and we have found that our
most material topics also closely reflect the
goals set in the UN’s global 2030 Agenda for
Sustainable Development:
• Safety (Goal 3)
• Offering (Goal 9)
• Responsible business practices (Goal 8)
• Supply chain (Goal 12)
• Our people (Goal 4)
We plan to update our Sustainability
Agenda 2020 in 2017 to include longer-term
goals in line with the SDGs.
In addition, we have integrated SDGs into
our Annual Targets, which are structured to
support our long-term goals and in the same
way also reflect the SDGs.
By developing and delivering our
technologies we take action to
combat climate change every day
Engaging with stakeholders
Stakeholder dialogue was identified as one
of the important topics in our materiality
analysis. We aim to enhance transparency
by maintaining continuous dialogue with
our key stakeholders.
We have defined the following groups as our
key stakeholders:
•Customers
•Employees
• The academic community
• Investors and financiers
•Suppliers
• NGOs and media
We also consider our planet and future
generations as stakeholders when evaluating
whether Outotec’s offering and operations are
future-proof.
To measure our success in engaging with
stakeholders, we have set targets related to
customer surveys, employee engagement and
local community engagement initiatives.
Outotec’s Sustainability Advisory Council, established at the end of 2014 to advise
the company on sustainability trends, strategies and reporting, gives input on how stakeholders view the economic, social and environmental impacts of our decisions. The six
Council members represent customers, investors, suppliers, NGOs and academia. In
2016, the Sustainability Advisory Council was
consulted twice in e-mail correspondence for
feedback on our Sustainability Report and for
views on Outotec’s sustainability agenda with
respect to the challenging business environment.
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OUTOTEC / SUSTAINABILITY REPORT 2016
We have also asked our employees’ feedback about the report and topics of interest
in sustainability communication in internal
social media. The other forms of stakeholder
engagement were not undertaken specifically
as part of the report preparation process.
To collect open feedback from our stakeholders we have published a form on our
website
LISTENING TO CUSTOMERS
Customer satisfaction is high on our agenda.
We build our understanding of our customers’ needs and challenges by systematically collecting feedback. We have also invested
in internal feedback channels and feedback
management to improve our products, services and operations.
Key parameters used by Outotec to measure global customer satisfaction are our Net
Promoter Score (NPS) and Customer Satisfaction ratings. Our NPS has shown an upward trend since global surveys started in
2015. The key drivers behind customer recommendations (NPS) and satisfaction include
our state-of-art technologies, product reliability and expertise. Our customers tend to
be more critical concerning our response and
delivery time. Our focus on service development is something our customers clearly appreciate (G4-PR5).
In 2016, we introduced a shorter and simpler feedback survey. Customers are asked to
comment on the most important factors behind the scores they give. This focus on open
comments helps us to tune in to customers’
true feelings and hear their voices. The 355
feedback records sent to us in 2016 included
some 1,400 individual comments. These comments form the basis for actions designed to
achieve improvements at all levels from individual accounts to the global level.
ENGAGING WITH EMPLOYEES
The year 2016 continued to be challenging in
terms of employee relations. Due to our cost
savings, restructuring and related reductions in our workforce, our employee engagement index further declined[link to Towards
employee engagement], as measured in the
Pulse employee survey conducted in May.
To deploy our changed operating model,
‘Outotec ’16’ events were held in each market
area office. Employees were invited to a ‘town
hall meeting’ to discuss Outotec’s overall plan
for the present market situation, and workshops were held to clarify how we work together in the new organization. The feedback
gathered from each market area about these
events was very positive.
We continued the CEO’s quarterly internal briefings. Employees have the opportunity to ask questions during briefings, and they
can also watch a video recording afterwards.
Markku Teräsvasara was appointed Outotec’s
new CEO in June, and he joined the company in October. To minimize uncertainty during
the transition period, internal video communication was increased on the Outotec News
Channel and more town hall meetings were
organized in various locations to introduce the
new CEO to our employees.
Our global intranet serves as a platform
for day-to-day information sharing. To complement it, Outotec News Channel for video
communication and the new Office365 collab-
oration tools were taken in full use in 2016.
The new internal social media tool Yammer
was quickly adopted for discussion and dialogue. At the end of 2016, over 3,400 employees were sharing their opinions in Yammer in
over 400 discussion groups.
Two Outotec Round Table events were
held during 2016 to bring together 21 personnel representatives and top management. The
topics discussed included our strategy, acquisitions, rewards, organizational changes, and
internal development programs.
Employees as owners
Many Outotec employees are also shareholders through O’Share, Outotec’s Employee
Share Savings Plan, which was launched in
2013. O’Share rewards employees for longterm commitment to the company. Approximately 27% (2015: 27%) of employees participated in this program in 2016.
The approximately 1,600 employees, who
participated in O’Share during 2013, and kept
the shares bought with their savings until May
2016, received the first free shares as a reward for their commitment and investment
in Outotec. Outotec offered beneficiaries one
free share (gross, with cash payments for taxes deducted) for each share bought with the
2013 savings.
Enhancing feedback culture
In November, we launched a new portal for
internal feedback internal feedback such as
improvement requests and ideas, reported
non-conformities and other observations to
be submitted and processed smoothly. The
portal will be deployed step by step. In the
Stakeholder expectations
and our engagement tools
Expectations
Our engagement tools
CUSTOMERS
• Creating value for customers
• Sustainable and safe products and services
• Social license to operate
Expectations
INVESTORS AND FINANCIERS
• Regular meetings according to Outotec Account
Management, Sell and Deliver processes
• Return on investment
• Quarterly briefings
• Customer satisfaction surveys
• Long-term economic perspective
• CEO’s mid-quarter Q&A sessions
• Compliance and transparency
• Capital Markets Day
• Joint R&D projects
• Training, user meetings, workshops
• Roadshows, one-on-one meetings, industry
seminars
• Seminars, conferences, trade shows
• Annual General Meeting
• Excursions to Outotec sites
EMPLOYEES
• Company values and a culture that enables
professional development
• Regular briefings and info sessions
• Long-term economic perspective
• Global intranet, collaboration tools and social
media
• Compliance and transparency
• Performance development dialogues
• Outotec Round Table
• Employee surveys
• Compliance helpline and feedback channels
• Young Professionals network
SUPPLIERS
• Fair treatment
• Working according to Outotec’s Deliver process
• Long-term partnership
• Supplier Policy
• Economic sustainability
• Supplier assessments and audits
• Joint continuous improvement of processes
• Outotec Supplier Days
ACADEMIC COMMUNITY
• Relevant technological and scientific challenges for
research
• Joint programs
• Feedback and encouragement from industry
• Operational data
• Thesis opportunities
for students
• Partnerships
• Internships
• Seminars, lectures, visits
• Networking
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OUTOTEC / SUSTAINABILITY REPORT 2016
Our engagement tools
• Annual surveys
NGOS AND LOCAL COMMUNITIES
• Transparency and proactivity
• Joint social programs with customers
• Engagement and local presence
• Support for local initiatives
• Social responsibility and respect
• Joint seminars and events
• Active use of social media
MEDIA
• Transparency and access
• Media briefings and interviews
• Interesting stories
• Success stories and blog postings on website
• Walk the talk
• Active use of social media
• Excursions to Outotec sites
first phase, people can give general feedback
related to global issues, processes and applications or propose local initiatives related to facilities, wellbeing and culture. During
November and December, altogether 31 observations and suggestions for improvements
were received through the new portal.
COOPERATION WITH THE ACADEMIC
COMMUNITY
Partnerships and networks with universities
and research institutions are an important
part of Outotec’s everyday business. In 2016,
Outotec cooperated with more than 30 universities and research institutions worldwide.
The scope of these partnerships varies,
but they are primarily related to technology development, digitalization and IoT development, systems integration, the circular
economy, hybrid materials, and water issues.
Outotec’s closest research partners in 2016
were Aalto University, the Technical Research
Center of Finland, Lappeenranta University of
Technology, Oulu University, and the Geological Survey of Finland.
Partnering with universities or other educational institutes also involves contributing to educational steering committees, guest
lecturing, software licensing, hosting student
groups, and collaborating on master’s and
PhD theses.
One example of educational cooperation during 2016 is the Sustainability Master
Class program, run for students, young researchers and professionals interested in new
approaches to innovation. The four-month
multidisciplinary program is organized together with the University of Helsinki. Read
also the Case: Sustainability Master Class.
Outotec has also established sustainability prizes to encourage university students to
apply their ideas to create practical innovations at:
• Central South University in China, where
Outotec has awarded the ten best projects
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OUTOTEC / SUSTAINABILITY REPORT 2016
promoting sustainable design in an annual competition run since 2013. In 2016,
a decision was made to continue this
cooperation for at least four more years.
• The University of Melbourne, Australia
• The South African Institute of Mining
and Metallurgy’s Mineral Processing
Symposium
REGULAR DIALOGUE WITH INVESTORS
Outotec’s approach to investor relations and
communicating with the financial markets is
based on Finnish law, EU directives, and our
own policies on corporate governance and
disclosure, as well as stock exchange rules
and regulations.
At the end of 2016, Outotec had 29,686
(33,830) shareholders. Shares held in 10 nominee registers accounted for 30.6% (27%) of
all Outotec shares, while private Finnish investors held 25.6% (30.9%). Fifteen analysts
conducted research focusing on Outotec.
The annual Capital Markets Day event was
held on June 7 at Outotec House in Espoo,
Finland.
In addition to our interim reports and annual financial statements, the CEO’s Q&A
sessions continued to be an important channel for maintaining dialogue. These audio
casts aim to further clarify information already made public.
In order to serve the capital market efficiently, to ensure equal access to company-related information, and to comply with
disclosure requirements, all our audio casts
are recorded and available for on-demand
viewing at the webcast center.
COLLABORATION WITH THE MEDIA
We interact with media representatives both
locally and globally to publicize our sustainability work. Our CEO’s quarterly briefings provide basic information about Outotec’s performance. We also organize interviews where
journalists can discuss our goals, new prod-
ucts and newsworthy events with our management representatives. We publish case
stories on our website for the media, and
aim to organize press trips to Outotec’s R&D
centers or reference plants at customers’
sites, in order to show concrete examples of
our work to journalists.
Our experts additionally meet trade press
representatives at exhibitions and conferences,
and share the latest product news with them.
WORKING WITH NGOS AND
LOCAL COMMUNITIES
Outotec contributes to community wellbeing
by paying taxes, providing direct and indirect
employment, and cooperating with educational institutions. We also participate in local initiatives to increase welfare in the countries
where we operate.
Outotec aims to support local projects
that benefit communities where our major
customers operate. These community projects are based on local needs and are
defined through dialogue with local communities. We strive to realize community projects
in collaboration with our customers, using
joint financing. We also aim to integrate voluntary work into community projects – both
during and outside working hours. All community projects must bring measurable benefits to the local community.
One such project was run at Westbury
Youth Center in Johannesburg, South Africa,
in collaboration with several other companies. Outotec donated a freight container and
steel structures to be used in building entertainment facilities at the center. In addition, Outotec employees donated their time to
participate in a community activation day at
the youth center, designed to empower young
people by encouraging creative and entrepreneurial engagement.
Another example of local community engagement is in Australia: Our employees in
Sydney and Perth took part in an initiative
by Salvation Army – bringing in gift and food
items to help needy families over the Christmas period.
Outotec continued to support the Baltic
Sea Action Group’s initiatives for the rehabilitation of the Baltic Sea, and sponsored the
Millennium Technology Prize. We also see the
Sustainability Awards we give to students in
South Africa, China and Australia as a means
of engaging with local communities.
Charitable financial donations were frozen
after Outotec’s Board of Directors proposed
to the Annual General Meeting of shareholders in April that there would be no budget for
such donations for 2016.
In 2016, 24% (33%) of our operations ran
local community engagement programs (G4SO1). Such activities had to be reduced due to
the weak financial performance of the company. We did not make impact assessments in
these programs or development plans due to
reduced resources.
Our target for 2016 was to start one
new community project. This was achieved
through our involvement in the Sustainability Master Class program at the University of
Helsinki in Finland.
OUR POLICIES RELATING
TO STAKEHOLDERS:
• Disclosure Policy
• Social media guidelines
• Donation Policy
• Code of Conduct
• Supplier Policy
Hydro Alunorte recognized Outotec for achieving
Safety – our number one
priority
Zero accidents is the ultimate target for
Outotec’s work on occupational health and
safety, as well as product safety. Our losttime injury rate improved in 2016.
Safety has been chosen as the most material
theme for Outotec, partly as a result of deeper stakeholder dialogue and partly because
our top management saw a need to improve
our safety performance and culture.
Outotec’s management remains committed to continuously enhance safety performance throughout the company’s operations.
We enable all employees and subcontractors working under our responsibility to work
safely by providing the necessary procedures,
instructions, training and personal protective
equipment.
Our reporting on health and safety covers Outotec’s premises and employees, contractors working under our supervision, and
Outotec’s project sites. It also encompasses
Outotec products and services, with regard
to compliance issues and incidents over their
entire lifetime. We primarily measure our
safety performance through the lost-time injury rate (LTIR), while also collecting data on
near misses and hazards. Our LTIR in 2016
was 1.8 (2015: 2.8) (G4-LA6, see also Social data). This significant improvement was
achieved mainly thanks to active safety training, intensified risk management for high-risk
work, and the wider identification and elimination of unsafe conditions and procedures.
In 2016, we created a new lost-time incident management system, which documents
incident investigations and the actions required to remove the root causes of the inci20
OUTOTEC / SUSTAINABILITY REPORT 2016
1.3 million hours with zero accidents in the
company’s Red Mud Filtration Project in Brazil
dents. The new system makes it easy to follow up corrective actions. It already operates
in combination with a company-level feedback management system, and further complementary measures will be realized during
2017.
Outotec’s certified, globally harmonized
quality, environment, health and safety (QEHS)
management system covers our 40 main locations (38). It includes procedures, work instructions and form templates to be used
throughout our global business processes.
Key elements in our QEHS management system include:
• compliance with legislation
• identifying and minimizing health and
safety risks
• preventing incidents
• recording and investigating incidents
• personnel training
• continuous improvement of our QEHS
performance
A global QEHS committee including members from the top management was established in 2015, but it did not convene in 2016,
due to various organizational and management changes. Instead, targets and development agenda were defined by our global
QEHS team. It has been decided that a new
Global Health & Safety committee will be established in 2017.
Our local health and safety committees
monitor actions, collect feedback and discuss
health and safety issues in their respective
locations or projects. Our entire workforce
(100%) is duly represented in these committees (G4-LA5).
During 2016, Outotec internally audited
safety practices at our permanent units and
main site activities. Safety performance was
found to be generally at a good level. Safety
systems at construction sites duly follow best
international practices.
External audits were successfully conducted in 2016 by TÜV Rheinland Cert GmbH
at our locations in Espoo, Lappeenranta,
Pori, Turku, Suzhou, Cologne, Oberursel and
Frankfurt, and at our construction sites in Dubai and Abu Dhabi. The relevant documentation on all of our certified locations was also
audited.
SAFETY IN FIELD OPERATIONS
The safety of our employees and contractors
is an important aspect of Outotec’s field operations at customers’ sites. Our project managers are responsible for the site activities
of Outotec and our sub-contractors, including the management of environmental issues,
safety, systematic practices, and cleanliness.
Outotec’s specialists also follow our customers’ own safety regulations when working on site. The greatest safety risks arise in
countries where awareness of safe working
practices is low, and occupational safety culture is underdeveloped. In such countries, our
employees are instructed to additionally follow Outotec’s own safety principles.
Outotec has a good track record of QEHS
performance in large customer projects, and
the company has received several safety-related awards from customers.
Employees working on site operations are
trained regularly in health and safety matters,
the use of protective equipment, hazard identification, risk assessment and required control actions.
Outotec’s employees often travel in highrisk countries. In 2016, 175 Outotec employees or persons working under our supervision traveled in countries with high medical or
security risks (G4-LA7). Outotec has a medical and security services agreement with the
global service provider International SOS. This
24/7 service covers all Outotec employees and
service providers for emergencies occurring
during business trips. Through the related
Medical Alerts and Travel Security Online service our employees can find information about
endemic diseases and other health, safety
and security issues, as well as country-specific risk ratings. Before any trip, employees
should check risk levels and find out what actions may be needed to reduce security and
health risks.
OUR POLICIES
• Code of Conduct
• Quality, Environment, Health and Safety
(QEHS) Policy
Safe products for our
customers
Outotec’s mandatory Product Compliance
Management process ensures that all
products engineered and delivered by
the company meet all applicable safety
standards during each phase of their lifecycle.
Outotec has a Product Compliance Management process in place to make sure that the
products and services designed and supplied
by the company worldwide reliably meet all
applicable safety standards during all phases of the product life-cycle. We follow negative impacts and incidents through our QEHS
management system and product compliance
management system, as well as through customer feedback collected after each major
delivery and in customer surveys.
Compliance with legal requirements is the
prime concern in Outotec’s product compliance management work. We maintain an extensive database of product compliance procedures and documents used during business
processes, including the development, sales
and delivery of our products and services.
Outotec’s products include equipment,
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OUTOTEC / SUSTAINABILITY REPORT 2016
processes, entire plants and services. Equipment and services delivered by Outotec fulfill
safety-related industrial standards such as:
• ISO 12100 and IEC 62061 for the safety of
machinery
• All safety-related industrial standards applicable where they are utilized
• Procedures for detecting hazards such as
explosion, fire, and lightning, and related
IEC 61882 HAZOP studies
• SIL Allocation Assessments (mandatory at
Outotec)
• The SafExpert risk assessment tool, which
ensures that equipment designed by Outotec fulfills all relevant safety standards.
We provide relevant information to our
customers about the impacts of our products and services, including their energy consumption, emissions, metal recovery rates,
and water usage, as well as safety information provided according to industry standards.
Safety issues form an integral part of our
operational manuals for industrial processes. Outotec manuals cover the entire life-cycles of the products delivered, in line with the
IEC 82079-1 standard. This means they contain information on transport, installation, op-
eration, maintenance and decommissioning.
In addition, we offer our customers maintenance services as part of a wider package. We
also routinely provide safety training for our
customers as part of our product training services.
The majority of our offices already use
harmonized product compliance management procedures. Our target for 2016 was to
take such procedures into use globally. We
continued to replace existing local procedures
with harmonized ones (G4-PR1), but we did
not fully achieve our target. In 2017, we plan
to review and simplify our harmonized product compliance management procedures, and
implement the new procedures globally.
Outotec has not identified any significant
negative impacts of its products on employees’ or suppliers’ health and safety (G4-PR2)
or local communities. No fines were imposed
in relation to non-compliance with laws and
regulations regarding the use of Outotec
products in 2016.
However, the possibility remains that information on indirect negative impacts occurring after the completion of any project delivery may not have been disclosed to Outotec by
customers or local communities.
Sustainable offering
for customers
Our contribution towards overcoming
the world’s environmental challenges is
made through our products and services,
which enable our customers to run
environmentally sound, profitable and
socially acceptable businesses.
Outotec’s customers are increasingly looking
for safe solutions to produce more with less.
Our solutions utilize primary resources efficiently and minimize ecological impacts by
reducing energy and water consumption, and
producing less waste to landfill and emissions
– while also cutting operating costs. We additionally offer solutions for processing secondary resources and turning side streams into
saleable products. Our ecological handprint
which we define as our positive overall impact
in terms of sustainability – is considerably
bigger than the ecological footprint of our own
operations and our suppliers’ operations.
A plant’s sustainability can be significantly enhanced through life-cycle services
and technological improvements. Based on
site-specific performance assessments, Outotec identifies areas for improvement and
offers solutions that will optimize plant performance and return on investment. Equipment upgrades, plant modernization projects,
and our long-term operation and maintenance services all ensure that plants will run
smoothly, safely and efficiently, with minimum
environmental impact at all times.
Our long-term targets (link) relate closely
to our handprint – we aim to offer more sustainable technologies and services to our customers, resulting in less harmful impacts on
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OUTOTEC / SUSTAINABILITY REPORT 2016
the environment. We measure our efforts to
mitigate the impacts of our products and services by our R&D work and the proportion of
recognized Environmental Goods and Services
(EGS) in our order intake (G4-EN27). Our reporting related to our offering covers Outotec’s premises and employees as well as our
products and services at customers’ operations.
We also used four additional indicators
of our own to measure our achievements in
2016:
• The share of Environmental Goods and
Services (OECD criteria) in our order intake, where we have reached our target
(over 90%) for several consecutive years.
• 20% reduction in CO2 emissions achieved
through the use of Outotec’s metals-related technologies compared to industry
averages. These technologies include: our
ferrochrome process; copper flash smelting; alumina calcination; ceramic filters;
the co-generation of electricity in the ferrochrome process; and as of 2016 also
coated titania anodes; and TankCell 300
flotation cells. Emission reductions are
directly proportional to energy savings. In
2016, the emissions avoided by the metallurgical industry through the use of seven Outotec technologies amounted to 5.9
million tonnes of CO2 equivalent (2015: 5.5
million) (G4-EN19). This equals 27% reduction.
• Implementation and commercialization
of our water recycling concepts. In 2016,
we piloted our first electrochemical water
treatment and recycling solution.
• Reductions in the use of fossil fuels resulting from Outotec waste-to-energy
plants, with targets of 60 MWe and steam
boilers that equal 60 MWth. The plants ordered in 2015 were under design and construction in 2016 but not yet in operation.
REDUCTION OF ENERGY
CONSUMPTION (G4-EN6)
In 2016, Outotec partnered with Thermo-System GmbH, whose low-energy drying method will be used with our waste-to-energy and
sludge incineration technologies in Outotec’s
thermal processing solutions.
Municipal energy and sewage treatment
companies will benefit from Outotec’s thermal processing solutions because instead of
composting the sludge, they can recover valuable nutrients and sell the resulting materials to fertilizer producers. Low-energy drying technology is typically used to pre-dry the
sewage sludge or wet peat before incineration, using waste heat from district heating as
an energy source. Part of the pre-dried sludge
will be mixed with the incineration ashes to
produce valuable raw material rich in phosphorus, nitrogen and potassium for the fertilizer industry.
In 2016, Outotec also continued building seven new waste-to-energy plants in the
United Kingdom and Canada, based on bubbling fluidized bed combustion technology.
This method is a proven solution for turning
waste into energy and disposing of solid or
liquid by-products. To ensure that strict emission limit values set by municipal and federal
governments are met, we can apply a combination of gas cleaning measures adjusted
according to the fuel designated in the overall
process design.
ENHANCING OUR OFFERING
R&D plays a central role in reducing the environmental impacts of our customers’ operations. In technology development, Outotec
particularly focuses on increasing resource
efficiency – aiming to reduce energy and water consumption, emissions, effluents and
waste.
Our R&D activity describes the extent of
mitigation of environmental impacts of our
product and services (G4-EN27). Some 66% of
our R&D expenditure was related to initiatives
targeting improved metals recovery, energy
Efforts to mitigate the environmental
impacts of our products and services
2016
2015
2014
R&D expenditure, EUR million
55.2
61.2
56.9*
R&D expenditure, % of sales
5.2
5.1
4.1*
Number of new patent applications filed
57
93
62
New national or regional patents granted
630
531
370
Number of patent families
786
824
749
90
90
90
Proportion of EGS in order intake, %
*) restated figure
Our handprint – which we define as our positive
overall effect in terms of sustainability –
is considerably bigger than our ecological footprint
saving, waste minimization, emission reduction and/or safety improvement.
Outotec is a core partner in the European
Institute of Innovation and Technology’s (EIT)
Raw materials Knowledge and Innovation
Community. This platform aims to make raw
materials into a major strength for Europe
by boosting competitiveness and the attractiveness of the raw materials sector. Outotec
participates in 20 related projects, aiming to
create new business by upscaling technologies, while also generating new educational
programs and strengthening Europe’s infrastructural network. Outotec also participates
in the technical secretariat of the EU’s Operational Environmental Footprint Sectoral Rules
(OEFSR), piloting for copper.
Outotec took over the Presidency of the
European Sustainable Phosphorus Platform
(ESPP) in December.
Read more about our representation in industry associations and commitment to external
initiatives at www.outotec.com/sustainability.
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OUTOTEC / SUSTAINABILITY REPORT 2016
Progress on product development
In 2016, Outotec successfully delivered a new
type of mine backfill system together with operational, maintenance and management services to OZ Minerals for their Prominent Hill
copper-gold mine in South Australia.
We also introduced a cost-effective
modular product for water treatment – the
Outotec® EWT-40. This Electrochemical Water
Treatment process is highly automated, and
able to handle contaminated wastewater and
effluents even in remote mining and metallurgical operations.
Our recently published Outotec Flotation
Modernization Guidebook reveals how Outotec’s
services can improve grade and recovery, enhance process stabilization and process control,
boost capacity, reduce maintenance costs, increase availability, cut energy consumption, extend wear life, and enhance safety.
Partnerships and networks with universities and research institutes also form an
important part of Outotec’s product development. In 2016, such cooperation focused on
developing a minimum impact concentrator
concept, aiming to minimize harmful local environmental impacts. Special attention was
paid to isolating process waters from adjacent
water systems, thus closing industrial water
cycles.
Another focus area for our R&D work has
been the development of monitoring, controlling and optimization capabilities for complex industrial processes, together with digital
platform development, through several programs run in collaboration with various research partners.
OUR POLICIES
• Outotec Technology Policy
• Outotec Intellectual Property Rights Policy
Responsible
business practices
In line with our core value, ‘committed
to sustainability’, we aim to incorporate
social, economic and environmental
sustainability into all aspects of our
operations. We foster good governance and
ethical business practices through thick
and thin, valuing integrity in all contexts,
and striving to protect Outotec’s good
reputation.
Outotec’s governance is based on the principles of good governance and transparency, as
well as our own group-wide policies and processes. We follow the Finnish Corporate Governance Code issued by the Securities Market
Association for listed companies. Outotec’s
management system documentation is compatible with and audited against such standards as ISO 9001 for Quality Management and
ISO 14001 for Environmental Management.
Outotec’s corporate governance is described
in more detail in our Corporate Governance
Statement 2016 [www.outotec.com/cg]. Our
reporting covers Outotec’s premises and employees, our products and services, and our
suppliers’ operations.
Outotec’s values and Code of Conduct
define our common way of working. Outotec endorses ethical business practices and
complies with national and international laws
and regulations. We are committed to work-
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OUTOTEC / SUSTAINABILITY REPORT 2016
ing against corruption in all its forms. We
similarly expect our suppliers and business
partners to follow the same principles and to
fully comply with all applicable anti-corruption laws.
CODE OF CONDUCT
Our Code of Conduct summarizes our key
corporate policies. All Outotec employees are
expected to know and follow the Code.
We reviewed our Code of Conduct during
2016, and its revised version was approved by
the Board of Directors in February 2017. The
focus of the revised code remains largely the
same: commitment to responsible business
practices, compliance with laws and regulations, solid governance, and the effective
management of sustainability and risks.
The Code of Conduct has been designed
to give everyone at Outotec ethical guidance
on various issues. Line managers are responsible for ensuring that their team members know the Code of Conduct and receive
any necessary e-learning or classroom training. In 2016, a total of 1,223 employees completed Code of Conduct training, corresponding to 30% of our personnel. In addition, a
total of 131 employees completed virtual
training on anti-corruption topics (G4-SO4).
Outotec was not subject to any corruption-related investigations in 2016 (G4-SO5),
nor did we have to pay any fines, or fulfil any
non-monetary sanctions for non-compliance
with anti-corruption laws (G4-S08) or environmental laws (G4-EN29). Furthermore, Ou-
totec was not subject to any legal actions for
anti-competitive behavior, anti-trust cases or
monopoly practices (2015: one reported case)
(G4-S07).
PRODUCT COMPLIANCE
Read about how our products comply with all
relevant regulations in Safe products for our
customers, page 21.
OUR BOARD OF DIRECTORS
A knowledgeable and engaged Board of Directors is a significant resource that can help
us to reach our short- and long-term goals,
and create sustainable increases in the value of the company for its shareholders. The
work, duties, composition and committees of
the Board of Directors are described in our
Corporate Governance Statement 2016.
The remuneration of Board members is
described in Outotec’s Corporate Governance
Statement on pages 13-15. There is no correlation between the compensation for Board
members and Outotec’s social or environmental performance.
New principles on diversity
for the Board of Directors
During 2016, the Board of Directors defined
a new set of principles on diversity. Based on
these principles, the members of our Board of
Directors must have the necessary knowledge
and experience with regard to the business,
social and cultural conditions in the most significant markets to Outotec’s business; while
they must also constitute a fair and balanced
combination of professional experience,
skills, gender, nationality, knowledge, and variety of opinions and backgrounds considering
Outotec’s current and future needs.
Outotec’s long-term objective is to have a
fair and balanced representation of both genders in the Board. When preparing for nominations to the Board of Directors, Outotec’s
Nomination Board will aim to ensure that
these diversity principles are followed, that
the Board functions well as a whole and that
the competence profile of the Board of Directors supports Outotec’s existing and future
businesses and is consistent with Outotec’s
strategic goals.
COMPLIANCE HELPLINE
FOR RAISING CONCERNS
Outotec’s Chief Compliance Officer (CCO) reports directly to the Board’s Audit and Risk
Committee on a quarterly basis regarding
any material compliance cases and developments.
Outotec’s compliance helpline is available to both internal and external stakeholders. This helpline enables anyone to raise
concerns or seek advice regarding ethical
behavior or Outotec’s Code of Conduct. All
of the concerns raised are treated confidentially, and there is a clear no retaliation policy
against anyone raising a question or concern
in good faith. More severe compliance cases
may be submitted to Outotec’s Compliance
Board, whose members are the Chief Compli-
ance Officer, the General Counsel, the Chief
Financial Officer, and the Head of Human Resources.
INTERNAL AUDIT AND RISK MANAGEMENT
Outotec’s strategic and operational risks are
described at www.outotec.com/investors, and
the company’s risk management policy, responsibilities and processes are set out in
our Corporate Governance Statement 2016 on
pages 9–10.
In 2016, a company-wide sales process
audit was conducted. In addition, specific audits were conducted in China and in Brazil as
well as follow-up audits of the market areas
Sub-Saharan Africa and Middle East.
Outotec’s internal and external audit processes take into account any corruption suspicions and fraudulent acts that may occur.
Training sessions are held in connection with
audit activities at our market area operations
to train employees in anti-corruption policies
and procedures for the purpose of preventing
misconduct and crimes. Virtual training sessions on anti-corruption are also available to
all employees.
Outotec uses a project risk assessment tool
to assess project-related risks within 10 key
categories, including compliance, ethics and
sustainability. Risk assessments must be carried out for all projects worth at least one million euros (G4-SO3). Identified risks and mitigation measures are documented in the risk
assessments, and appropriate follow-up actions
are duly defined on the basis of these findings.
In product management, we utilize a
Stage Gated Product development process, in
which the first phase includes business risk
and opportunity checks. It also includes criteria, which are related to a new product’s risks
and especially opportunities to precautionally mitigate the climate change, i.e. energy
savings, emissions reduction, water savings,
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OUTOTEC / SUSTAINABILITY REPORT 2016
waste minimization, improved metals recovery and safety improvement (G4-14).
EQUAL OPPORTUNITIES
AND LABOUR PRACTICES
Our approaches to equal opportunities and labor practices are described in Enhancing employee engagement, page 28.
RESPECTING HUMAN RIGHTS
Outotec is committed to support and respect
the protection of internationally proclaimed
human rights. This commitment is reflected in our revised Code of Conduct and in our
company policies. We remain committed to
treat all people with dignity, and we recognize that every individual is equally entitled to
enjoy human rights. We do not provide goods
or services that we know will be used to carry out human rights abuses, and we work
towards the effective abolition of the use of
compulsory, forced or child labor.
Outotec joined the United Nations Global Compact Initiative back in December 2010,
and we remain committed to its principles
and the principles of the Universal Declaration of Human Rights. These commitments
are restated in our revised Code of Conduct.
In 2016, two reported incidents of discrimination were filed through formal grievance
mechanisms within Outotec (G4-HR3, G4HR12). These incidents were reviewed locally,
in cooperation with Global Human Resources function and the Chief Compliance Officer.
Remediation action plans were implemented and results reviewed through our routine
management review processes. These incidents are no longer subject to action.
There were no incidents filed through formal grievance mechanisms related to our
suppliers’ human rights impacts (G4-HR11),
impacts on society (G4-SO11), or labor practices (G4-LA16).
In 2016, we reviewed our Code of Conduct
including the human rights perspective. We
also initiated a human rights assessment of
our own operations at the end of 2016. As the
first phase of this assessment, our company policies and guidelines relating to human
rights were examined in comparison with the
UN Guiding Principles on Business and Human Rights (UNGP) by an external consultant. This analysis resulted in policy-specific
recommendations that will help us to further
align our policies with the UNGP. The results
will be taken into consideration in our future
policy revisions. We plan to continue the human rights assessment of our own operations
in 2017.
Furthermore, as a new annual target with
the theme Responsible business practices,
we will conduct working condition assessments in our main manufacturing and services sites. These will include audits of physical
working conditions as well as certain labor
rights topics.
Outotec has not identified, through formal
grievance mechanisms or in its risk assessments, any significant negative impacts of its
operations, products or suppliers with regard
to health and safety (G4-PR2), or local communities (G4-SO2). During 2016 no issues
emerged concerning the rights of indigenous
people.
In product management, we utilize a
Stage Gated Product development process, in
which the first phase includes business risk
and opportunity checks. It also includes criteria, which are related to a new product’s risks
and especially opportunities to precautionally mitigate the climate change, i.e. energy
savings, emissions reduction, water savings,
waste minimization, improved metals recovery and safety improvement (G4-14).
MANAGING SUSTAINABILITY
Outotec’s Executive Board is responsible for
our sustainability agenda (G4-34). The Executive Board additionally approves our sustainability strategy, targets and reporting. Our
General Counsel, who is a member of the Executive Board, has overall accountability for
corporate responsibility. Responsibility for the
sustainability of our products and services
lies with the Technology and Product Board,
chaired by the CTO. Related decisions, actions
and commitments are duly reported to the
Board of Directors.
Sustainability is integrated into all relevant organizational functions, such as Quality, Environment, Health and Safety (QEHS),
Supply, Human Resources & Communications, and Legal & Contract Management. We
have a Sustainability Working Group, whose
core team coordinates sustainability work and
meets frequently whenever needed.
Outotec’s Sustainability Advisory Council, established at the end of 2014, advises
the company regarding sustainability trends,
strategies and reporting, and gives input on
how stakeholders view the economic, social
and environmental impacts of our decisions.
The Council is not part of Outotec’s formal
governance, however. In 2016, the Sustainability Advisory Council was consulted in e-mail
correspondence for feedback on our Sustainability Report and for views on Outotec’s sustainability agenda and focus, with respect to
the challenging business environment.
Sustainability-related personal targets are
included in the annual bonus plans of Outotec’s Executive Board members, QEHS managers, and environmental and sustainability
managers. Inventors working with new, patentable solutions receive monetary rewards
for their inventions. Furthermore, Outotec
rewards all employees for making proposals
that improve the sustainability of the company’s internal processes.
OUR POLICIES
• Code of Conduct
• Donation Policy
• Supplier Policy
• Risk Management Policy
• Disclosure Policy
Board of
Directors
CEO
Executive
Board
Head of Legal
& CR
OUTOTEC / SUSTAINABILITY REPORT 2016
Technology and
Product Board
CTO
Working group
Sustainability aspect
Strategy
Head of
Strategy
QEHS
Head of
QEHS
26
Sustainability
Advisory Council
People
Head of Human
Resources
Supply chain
Head of
Supply
Governance
and compliance
Head of Legal
& CCO
Economic
CFO
Investor
Relations
Head of IR
Communications
Head of
Communications
Building a sustainable
supplier base
Our wide product range and a high
number of different delivery locations
make our supply chain development and
management challenging. Standardization
and harmonization are key drivers in
establishing a sustainable supplier base.
Our supply chain management covers Outotec’s own operations and often also those
of our suppliers. Our Global Supply function
manages our supplier base and global sourcing. Operational Supply personnel are involved
in day-to-day supplier management during
the project delivery phase.
Outotec has two main policies serving as
the basis for collaboration with suppliers. Our
Supply Policy steers supply activities throughout the company, defines ways to enhance
supply quality and provides guidelines for
everyone involved in supply-related activities.
Our parallel Supplier Policy imposes
strict requirements on Outotec’s suppliers,
by clearly setting out our principles on ethical conduct, compliance with laws and regulations, environmental impacts, health and
safety, labor, intellectual property and improper benefits. Suppliers are expected to ensure
compliance with Outotec policy, identify any
deviations, manage corrective actions, ensure the transparency of these actions and
communicate with us systematically on such
issues. As all of our major suppliers (2015:
92%) were committed to Outotec’s Supplier
Policy in 2016, we achieved our annual target.
Our reporting covers our suppliers’ operations, contractors working under Outotec’s supervision, and our project sites. We
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OUTOTEC / SUSTAINABILITY REPORT 2016
measure our performance by calculating the
percentage of new suppliers screened using
criteria on labor practices, environmental impacts and human rights.
OUR SUPPLIER BASE
Our manufacturing facilities are relatively
small. They all have local quality, health and
safety systems in place, and they duly manage, sort and process their wastes. Since
some 80% of Outotec’s manufacturing is
sourced from external suppliers (by monetary
value), supplier selection is of key importance
to our business.
Outotec had approximately 3,300 (3,400)
active direct suppliers in 2016. Most of our
suppliers were based in Finland, Germany,
Brazil, Australia, and South Africa. Outotec
has also developed best-cost-country sourcing in China, India, Eastern Europe, and Mexico.
The majority of our direct suppliers are
either manufacturing workshops or component/equipment manufacturers. The rest are
logistics, engineering and construction companies, and other service providers. In addition, thousands of our direct suppliers’ own
suppliers form part of Outotec’s supply chain.
Our total spend on customer-related purchasing in 2016 was EUR 586 million (629 million). Total spend decreased due to declining
order intake and sales.
SELECTING NEW SUPPLIERS
AND SUPPLIER AUDITS
Of the potential 1,435 new suppliers in 2016,
Outotec screened 164 suppliers, corresponding to 11% of all potential suppliers (2015: 70;
18%), using criteria related to environmental
impacts (G4-EN32), human rights (G4-HR10),
and labor practices (G4-LA14, G4-LA15). The
remaining potential new suppliers were in
categories that we do not normally screen,
such as one-time indirect suppliers who are
normally approved by default. Some of these
non-screened suppliers have, however, also
signed our Supplier Policy. No potential new
suppliers were screened using criteria for impacts on society (G4-SO9).
Human rights impacts were assessed as
part of the screening of potential new suppliers. All the screened companies qualified as
new suppliers as none of them were identified
as having significant potential negative human rights impacts (G4-HR11).
Outotec has not identified any significant
actual or potential negative impacts with regard to labor practices in its supplier screening (G4-LA15).
In addition to screening new suppliers,
Outotec audited over 20 major suppliers
during 2016. In our supplier audits, 8% of
the audited suppliers were identified as
having negative environmental impacts
(G4-EN33). These impacts were relatively
small and related to operational eco-efficiency, and none of these impacts were considered as potentially significant in Outotec’s assessment. Common development topics and
improvement measures were subsequently
discussed and agreed with these suppliers.
No relationships have been terminated as a
result of our supplier audits.
WORKING TOGETHER WITH
OUR SUPPLIERS
Outotec’s Supplier Account Managers work
with our most important global or local sup-
We strive to improve cost
efficiency without compromising
on product quality,
safety and sustainability
pliers. They are responsible for facilitating
collaboration between Outotec and our suppliers across and above individual projects.
This procedure enhances visibility, alignment
and the management of supplier-related
risks, while also improving overall collaboration between Outotec and individual suppliers.
The main challenge for our supply chain
management in 2016 concerned the need to
improve cost efficiency without compromising
on product quality, safety and sustainability.
The allocation of more business to fewer suppliers enables better management and development partnerships, in turn enhancing delivery excellence and cost competitiveness.
During 2016, we continued to train our
sales and project implementation personnel
on our project risk assessment process and
tool, which were then tested in larger sales
cases. The resulting risk assessments have
provided our management with important information about major risks and planned mitigation actions.
SPENDING ON LOCAL SUPPLIERS
Outotec’s supply chains often combine global project deliveries and purchases from local
suppliers. We define ‘local suppliers’ as suppliers who we do not manage globally from
our offices in Finland, Germany, and Sweden. However, even in projects that are man-
Enhancing employee
engagement
aged globally, the supply defined as ‘global’ includes some local subcontracting in the
countries concerned.
Our spending on local suppliers in 2016
amounted to EUR 310 million (EUR 270 million), equivalent to 64% of our total supply
spend (G4-EC9). The largest shares by country – each amounting to EUR 10–50 million –
were spent in the USA, China, Australia, the
UAE, Sweden, South Africa, Mexico, Chile, and
the UK. The remaining local spend was distributed among 45 countries.
ACTUAL AND POTENTIAL NEGATIVE
IMPACTS IN THE SUPPLY CHAIN
No notable risks related to the use of child
labor (G4-HR5) or forced or compulsory labor (G4-HR6) have been identified in Outotec’s
own manufacturing units.
The main sustainability-related risks in
the supply chain, identified in our internal
workshops, include bribery and kickbacks,
occupational safety, protecting information,
and reporting misconduct. With regard to
environmental issues, material toxicity and
chemicals were ranked as the greatest risks
(G4-EN33, G4-SO10).
In addition, we have identified three countries in our supply chain with potential risks
regarding child labor (G4-HR5), hazardous
work, or rights to exercise freedom of association or collective bargaining (G4-HR4). These
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OUTOTEC / SUSTAINABILITY REPORT 2016
countries are China, India, and Mexico.
In 2016, 5% (3%) of our suppliers were based
in China, 2% (2%) in India, and 1% (2%) in
Mexico. To mitigate these risks, our dedicated
supply personnel in each of our Market Area
offices perform Supplier Assessment and Approval Processes carefully and make observations during audits and other visits. Forced
or compulsory labor has not been identified
as a potential risk in Outotec’s supply chain
(G4-HR6).
The carbon footprint of our supply chain
An analysis of the carbon footprint of our supply chain conducted in 2016 showed that the
biggest sources of CO2 emissions in Outotec’s
supply chain were metal products, representing 27% (25%) of the total. In 2016, the carbon footprint of our supply chain, at 360,000
tonnes of CO2 equivalent (345,000) (G4-EN33),
was considerably larger than the footprint of
Outotec’s own operations, which amounted to
24,847 tonnes of CO2e (33,584) (G4-EN16, G4EN17).
Calculations were based on Outotec’s
spending and supply chain emission factors
as defined by the UK Department for Environment, Food and Rural Affairs (DEFRA).
OUR POLICIES
• Supplier Policy
• Supply Policy
After several years of restructuring,
employee engagement continues to be the
key theme for developing our people.
The market situation continued to be very
challenging for Outotec, although the market
picked up towards the year end. As a result of
our EUR 70 million cost structure program,
simplifying our operating model and strengthening our focus on customers and services, Outotec also had to reduce altogether 650
jobs in 2016.
Despite actions taken after the previous
employee engagement survey, results in both
employee engagement and performance enablement continued to weaken. In the Pulse
survey conducted in May 2016, the employee
engagement index fell to 42% (2015: 56%) and
the performance enablement index declined
to 54% (2015: 63%).
Based on the survey results and related
feedback from our employees, concrete actions that would help to re-build trust and engagement among employees should include:
• Communicating a clear strategy and
translating it into concrete actions at all
levels to benefit our employees
• Creating clarity and simplifying our ways
of working in order to allow our people to
focus more on customers
• Ensuring strong leadership presence
• Empowering and engaging our people to
make Outotec a better place to work
HIGHLIGHTS IN RELATION
TO DEVELOPING OUR PEOPLE
Strategy shaped with employee participation
Employees from our Market Areas and Business Lines participated in strategy revision
work realized in spring 2016. The implementation of the strategy was supported by the
Outotec 2016 roadshow in major locations,
where leaders were engaged in change management planning, and employees had a
chance to hear about the strategy and discuss
it with their leadership.
Strong focus on leadership development
A global leadership program for 100 leaders was kicked-off in November. The program
consists of face-to-face modules, benchmarking group work, 360° feedback and
coaching (G4-LA10).
In addition, local leadership programs
have been developed in each country, and all
Outotec managers and leaders will have an
opportunity to join a development program by
the end of 2017.
Continuous support for professional growth
A total of 2,391 employees participated in
training activities during 2016. We delivered
6,467 training instalments in total, most of
which consisted of online courses focusing on
technical issues; quality, environment, health
and safety (QEHS); or legal and compliance
issues. In total 5,855 online courses were
completed, of which 1,533 related to QEHS
and 260 to technical issues. Technology-related classroom training was provided for 423
Outotec employees during 2016.
Meanwhile, work started on the development of a certification program for our
technical service experts who work with our
products and technologies. This certification process features a multi-level training
program designed to allow people to develop
their technical skills and apply them in onthe-job situations at a Basic, Advanced, and
Master level. 50 people were nominated as
pilot participants to start the program.
Several groups started their mentoring
programs in the areas of solution sales, process, and metallurgy. The program will continue to expand in 2017, with engineering and
contract management as new topics.
A Value Selling training program was developed to enhance our sales force’s competences in customer interfaces. Through this
highly interactive and role-play-based training we are striving to build, communicate and
coach value propositions that can be offered
to the customers based on their identified
needs and values.
PROMOTING EQUAL OPPORTUNITY
AND DIVERSITY
As an international company with a global presence, Outotec values diversity at the
workplace. We treat people in an equal and
fair manner regardless of their ethnic origin,
nationality, religion, political views, gender,
sexual orientation, disability, family status or
age. We follow the principle of equal opportunities.
We continuously monitor diversity and
equality within Outotec, and we have set tar29
OUTOTEC / SUSTAINABILITY REPORT 2016
gets for improvements in these areas. As a
company operating in a male-dominated industry, gender equality is a very important
topic for Outotec. We already have a relatively
good representation of women in senior leadership positions (16% of senior leadership position are held by women, compared to 18%
of all Outotec employees), and we are taking
active measures to improve this ratio. We also
monitor the number of filed, addressed and
resolved grievances about labor practices. In
2016, two reported incidents of discrimination
were filed through formal grievance mechanisms within Outotec (G4-HR3, G4-HR12), but
no registered cases regarding labor practices
(G4-LA16). Our reporting related to equal opportunity and diversity covers Outotec’s employees and suppliers.
A decision was made in 2016 that all open
positions will be published internally to enable all Outotec employees to apply for positions through a fully transparent recruitment
process. We also launched a new employee
profile to allow employees to promote their
career and let our organization know about
their expertise. We encourage our employees
to take an active role in their own career development, and we aim to promote new tools
to support this target.
FOCUSING ON EMPLOYEES’ EXPERIENCES
Outotec’s annual Performance Development
Dialogue (PDD) process went through a major renewal in 2016, based on feedback received from our managers and employees. A
new concept to be launched in 2017 will better support value-adding development discussions at Outotec. Due to these systemic changes, we do not have exact data on the
numbers of employees who underwent regular performance and career development
reviews during 2016, but the available data
indicates that coverage is about 95 per cent
(G4-LA11).
Our Human Resources (HR) function
has put a lot of emphasis on implementing
global policies and processes and clarifying
roles and responsibilities, in order to ensure
smooth operations and the equal treatment
of our employees in global mobility cases,
for instance. To align HR practices globally
and drive our One Outotec culture, a new HR
handbook was launched for the HR community. This initiative was supported by extensive
communications.
OUR POLICIES
• Code of Conduct
• HR Handbook
• Competence Development Policy
• Recruitment and Onboarding Policy
• Compensation Policy
• Global Mobility Policy
• Job Description and Job Title Policy
• Grading Policy
Cases
demonstrating
our approach to
resource efficiency
On the following pages we showcase our approach by describing
some concrete cases that illustrate
how we put resource efficiency
to the forefront in our work with
customers.
CASE: Optimal water management
for mine sites
Water plays a key role in the mining
industry. Our customers face challenges
including the need to meet business
performance targets and reduce their water
consumption. Outotec’s solutions offer
flexible options for the management of
complex, site-specific water streams.
Water has a central role in mineral processing. However, the availability of water can be a
major concern for mine operators. Mines are
often in remote locations with highly limited
natural water reserves. Tightening regulations and increased environmental awareness
have recently made it increasingly important
to monitor and manage water balances effectively.
Already today, Outotec’s customers are
facing resource scarcity, particularly when
it comes to minerals. As the metal content
of ores decreases, more ore must be excavated and processed to produce the desired
amounts of metals and end-products. This
in turn increases the need for water in these
processes.
All this is pushing mine operators to seek
new, digital ways to optimize their water usage.
MORE EFFICIENT AND
SUSTAINABLE ORE RECOVERY
With proper monitoring, we can ensure that
ore grades and recovery rates are not reduced
by poor quality water. The chance to keep an
eye on water-related KPIs in real time enables our customers to stay informed on busi30
OUTOTEC / SUSTAINABILITY REPORT 2016
ness-critical information and spot potential
issues in good time.
Lower effluent volumes mean that customers also save on operating costs and reduce risks. Dynamic and real-time water balance simulations, risk analyses and forecasts
of future scenarios allow our customers to
stay more than one step ahead, and tackle
challenges related to excess water and flooding.
“We also send out our experts to support
customers throughout their daily operations
by assessing their water management periodically, and then giving recommendations,”
says Susanna Horn, Life Cycle Manager. “Our
dedicated Operations Support Center is available around the clock to provide optimization and decision-making support within the
agreed response time.”
Above all, our service concept enables our
customers to focus on their core operations.
IMPROVED VISIBILITY
THROUGH DIGITALIZATION
By using advanced hardware and software
solutions provided by Outotec, it is now possible to monitor water quantities and qualities
in real time. We can also calculate scenarios to illustrate the development of the water
balance in the coming weeks, or map out the
effects of potential process changes on water
quantities and quality.
“These digital capabilities form the core
of Outotec’s offering for water management,”
says Eija Saari, Service Product Manager, Dewatering Solutions. “It’s our ability to simulate
changes and evaluate scenarios that sets us
apart from our competitors.”
Above all, our service concept
enables our customers to focus
on their core operations
SCALABLE CONCEPT
OPTIMIZES WATER FOOTPRINT
Outotec has unique industry-relevant water
and process expertise which we combine with
our online sensing, modeling and automation
know-how.
“We know what types of water our customers’ plants need, and how this water
needs to be treated to stabilize production,
reduce water-related business risks, and
achieve a sustainable balance of water supply consumption,” says Kaj Jansson, Director,
Mineral Processing Concentrator.
Our scalable water management concept
combines online measurement with dynamic
water balance monitoring. This scalable service has three modules: Monitor, Manage and
Predict & Evaluate
Outotec’s Dynamic Water Balance with
HSC Chemistry is an automatically updated
thermodynamic calculation software system,
often used in metallurgical modeling, which
can also be applied in dynamic water balance
modeling.
SECURE DATA MANAGEMENT
Outotec’s customers always retain ownership
of their data. The information collected by Outotec’s sensors to support customers’ daily
operations is managed securely: only the experts working on the project have access to
the customer’s data.
Our information security management
and practices are based on the ISO/IEC 27001
and 27002 standards.
Monitor
Manage
Predict & Evaluate
Real-time information on
water quantities and quality
Forecasts and scenarios for
operational conditions
Based on physical
instrumentation and online
visibility
Able to use customer’s water
balance and KPIs, as well as
data from various sources
Scenarios to facilitate
evaluations of best investment
alternatives and options for
process optimization
Visualizes the results
HSC software
The highest level of service
HSC software
CASE: Innovative technologies
for nutrient recycling
Dwindling deposits of mineral phosphorus
and eutrophication are major challenges
that affect Outotec’s customers – and also
our whole planet. Outotec offers a wideranging portfolio of comprehensive sludge
treatment solutions for energy production
and nutrient recycling, complemented by
partnerships.
The phosphorus fertilizers currently used in
agriculture today are a non-renewable resource mined from finite mineral deposits.
Mineral phosphorus is becoming increasingly rare, and the food supply in some regions of
the world is already completely dependent on
imported phosphorus.
We believe that nutrient recycling will help
to combat eutrophication and shortages of
phosphorus. By using the right technology, it
is now possible to recover phosphorus from
sewage sludge for use as a fertilizer.
“When municipal energy and sewage
treatment companies can recover valuable
nutrients and sell them to fertilizer producers, this benefits society as a whole,” says
Tanja Schaaf, Senior Product Engineer, Thermal Processing.
OLD TECHNOLOGY – FOR A NEW PURPOSE
The basic ASH DEC technology is a thermochemical process for separating heavy metals
from ash generated during the combustion of
industrial and municipal waste. The combus-
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OUTOTEC / SUSTAINABILITY REPORT 2016
tion of sewage sludge also produces electricity and heat usable for district heating. Combustion also produces ash, from which we can
recover phosphorus. In addition to turning
waste into new raw materials or even directly into products, ASH DEC can also reduce
hazardous landfill volumes and ash-handling
costs.
PARTNERSHIPS FOR DRIVING
NUTRIENT RECYCLING
In 2016, Outotec partnered with Thermo-System GmbH, a German based global leader
in low-energy drying technology. Such technology is mainly used for pre-drying sewage
sludge or wet peat before incineration. Part
of the resulting pre-dried sludge can now be
mixed with incineration ash to produce valuable raw materials rich in phosphorus, nitrogen and potassium.
In May 2016, Outotec and Ecolan, the
leading Finnish forest and organic fertilizer
producer, won the first prize in a Sitra competition looking for solutions for nutrient recycling. The companies’ solution, Fullrec, combines three technical processes: Outotec’s
DeBugger and ASH DEC processes, and Ecolan’s granulation process. Through this tested
and proven approach, digested sludge is not
burned, but dried and mixed with ash. The resulting mixture is then granulated to create
a product that can be transported cost-efficiently.
“Together with Ecolan, we have been developing this concept in the new industry zone
ECO 3 in the Finnish city of Nokia,” says Ju-
hani Anhava, Director, Energy & Environment
Business Development. “The goal is to develop a thermal treatment plant for sewage
sludge. The project is currently in the construction phase, and expected to become operational in the first quarter of 2017.”
SUPPORT FOR CHALLENGING CONDITIONS
In 2016, Outotec secured a contract with the
Italian engineering company Desmet Ballestra S.p.A Milano, to design and deliver a
solvent extraction plant to purify fertilizer
phosphoric acid before evaporation.
The customer’s operations in a desert
area in Egypt face several challenges affecting the viability of fertilizer production,
including:
• The isolated location of the plant
• The low phosphate content of the ore body
• The relatively large throughput of the
plant
• Impurities created in the process
Outotec’s basic design for the solvent extraction facility is based on scalable modules,
making it ideal for application to diverse customer needs. Such a modular solution enables the creation of a closed system, reducing emissions of volatile organic compounds
(VOCs). The modules are easy to transport
and install, which reduces the total delivery
time dramatically, and also brings safety benefits. As the life-cycle of the plant comes to its
end, the modules can be transported to other
locations, avoiding the expenses that characterize conventional plant closures. Outotec
Scalable modules are ideal
for diverse customer needs
provides the customer with VSF®X technology,
a license, equipment for crud treatment, and
a cooling tower.
Outotec will also deliver two sulfuric acid
plants for the same project. The technology
offered by Outotec improves the sustainability
of NCIC’s fertilizer plant by:
• Minimizing fugitive emissions of
sulfur dioxide from the acid plant
• Generating carbon-free energy by applying our HEROS heat recovery technology
• Reducing the plant’s consumption
of raw water
Resource efficiency has
CASE: Flotation retrofit boosts
performance at Yamana Gold’s mine
At Yamana Gold’s gold and copper mine,
the identification of flotation issues led to a
turnkey retrofit project that has generated
significant improvements in recovery rates,
while also reducing energy consumption.
Yamana Gold is a Canadian-based gold producer with mines and operations in Canada, Mexico, Brazil, Argentina and Chile. The
company’s Chapada open pit gold and copper
mine in Brazil began production in 2007.
When it comes to the efficient mining of
precious metals, flotation performance is
of the utmost importance. Outotec’s role in
improving Yamana Gold’s operational efficiency began with the delivery of a Courier
on-stream analyzer, which Yamana’s personnel used to assess the performance of their
processes. Their analysis showed that considerable amounts of gold and copper had
been ending up in tailings. The flotation cells,
provided by another supplier, were prone to
sanding, which caused repeated disruptions
in the flotation circuit.
Yamana conducted a thorough evaluation of alternative courses of action, and then
turned to Outotec, whose metallurgical and
mechanical assessments showed large potential for improvement in the flotation process. In March 2016, a turnkey retrofit project
of 10 non-Outotec flotation cells with Outotec
TankCell® and FloatForce® technology was initiated.
“The Yamana Gold case is a great example
of the benefits of paying attention to resource
efficiency,” says Miika Tirkkonen, Senior Manager, Service Product Management. “Valua32
OUTOTEC / SUSTAINABILITY REPORT 2016
ble material was being continuously lost due
to inefficiencies in flotation, and recovery was
unsatisfactory. By modernizing the equipment, Outotec was able to improve both the
productivity and the energy efficiency of the
flotation process.”
SAVINGS FROM MINIMIZED
SHUTDOWN TIME
The project scope included:
• Computational Fluid Dynamics
(CFD) studies
• Basic and detailed engineering
• Shutdown planning
• Delivery of proprietary equipment
• Turnkey installation, commissioning
• Assisted operation
• Advanced training of on-site personnel
Customized steel works were manufactured in Brazil, which enabled short delivery times, contributing to the flexibility and
overall efficiency of the project. Outotec also
provided all installation and commissioning
personnel, except for certain locally contracted electrical specialists. In total, more than 80
Outotec experts took part in the modernization, working in two shifts to ensure the efficient use of the available time.
Minimizing shutdown time and production
loss was naturally vital to the customer. Outotec was able to answer this challenge with
a tailored concept that took the project’s total
cost and return of investment into consideration. The second bank shutdown took only
six days, instead of the planned eleven, saving
valuable time and allowing Yamana to restart
operations sooner than anticipated.
resulted in concrete benefits
at Yamana Gold
OPERATOR TRAINING
PROVIDES ADDED VALUE
In addition to the retrofit, Yamana needed a
dependable partner who could help the company improve its operations on a continuous
basis, and Outotec was happy to step forward.
Outotec provided Yamana with advanced operator training, using its Virtual Experience
process to familiarize the mine operators with
the technology and instructing them in its efficient use.
“Outotec is best known for its technological solutions, but we also give great importance to our service offering,” says Annami
Toukoniitty, Director, Services Business Development. “The skilled operation of a mine’s
technological assets can have a profound effect on its profitability as well as its maintenance needs. By offering elated training
services we can give added value to our customers.”
COOPERATION CONTINUING
Yamana Gold’s flotation issues were successfully resolved, creating major benefits for the
mine, including:
• Greater stability and control of flotation
cells, allowing for increased process optimization
• Significantly reduced energy consumption,
thanks to the use of Outotec cells (40%)
• Minimized sanding, and increasing flotation circuit availability
• Improved flotation performance, enhancing the recovery of both copper and gold
Cooperation between Yamana Gold and
Outotec is now continuing with the identification and removal of other potential bottle-
necks, which will further improve the performance of the entire facility.
“The close cooperation between Outotec
and Yamana has helped us to plan and implement the retrofit project in an atmosphere of
mutual trust, creating a solid base for continued partnership,” explains Miika Tirkkonen.
Yamana Gold retrofit project
Customer
Yamana Gold
Project site
Chapada open pit gold and
copper mine in Brazil
Challenges
unsatisfactory flotation
performance; repeated
disruptions due to sanding
Solution
retrofit of 10 flotation cells
with Outotec technology
Results
improved flotation
performance, availability and
recovery
CASE: Sustainability Master Class Diving into customers’ operating environment
Launched in December 2016, the
Sustainability Master Class is jointly
run by the University of Helsinki and
Outotec to fuel innovation by activating
an interdisciplinary group of 45 young
researchers and professionals.
Two of Outotec’s mentors involved in the
program, Susanna Horn, Sustainability
Development Manager, and Markku Uoti,
Senior Manager – Risk Management,
explain the background and goals behind
the program.
The Sustainability Master Class is mentored
by business and technology experts who define real-life business challenges and opportunities for the class to consider and constantly support participants’ co-creation work.
Themes including social license to operate (SLO), technology leapfrogging and disruptive business models create the backbone
for the four-month program, as risks and opportunities that characterize our industry.
“Outotec’s legacy is widely understood
as an equipment supplier,” explains Markku
Uoti. “However, in recent years our strategy
has heavily underlined customer-centricity
and service business, so our customers’ daily
operating challenges are now our challenges too.”
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OUTOTEC / SUSTAINABILITY REPORT 2016
The University’s entrepreneurial community Helsinki Think Company and the Demos
Helsinki think tank are facilitating the process.
FROM COMPLIANCE TO
STRATEGIC SUSTAINABILITY
When defining themes for the program,
Outotec chose to approach the entire value
chain – from minerals to refined metals.
“Focusing only on our own operations and
their sustainability might lead only to limited
improvements in comparison to the greater
potential along our entire value chain,” says
Susanna Horn. “This is why we broadened the
horizon to cover the customer’s perspective
as well. The participants will become familiar
with the sustainability of the whole industry.”
Many of Outotec’s customers today face
sustainability-related concerns, from excessive water and energy consumption to environmental hazards. According to Markku Uoti,
who works with risk management issues at
Outotec, companies in the mining and metal processing industries are characterized by
different maturity levels and attitudes when it
comes to handling these risks.
The most advanced companies do not only
seek to comply with regulations, since they
also want to be forerunners and redeem their
SLO – while at the same time benefiting from
resource efficiency, and thereby gaining a
competitive advantage.
“These customers expect us to be their
trusted partners, who can lower their opera-
tional risks and their water and energy consumption,” adds Horn. “This means considerable economic savings for them as well as
environmental benefits. We at Outotec hope
this group will grow in the future.”
At the other end of the spectrum there are
players – especially in developing countries –
who operate at the lowest possible costs, and
sustainability may not be their first priority
when dealing with water and tailings, for instance. Local communities may consequently suffer from environmental impacts such
as bursting dams and contaminated drinking
water.
This gap leads to the concept of leapfrogging, which is one of the challenges being addressed by the Sustainability Master Class:
Could there be ways to accelerate the development of such negligent operations by enabling them to skip less efficient and more polluting technologies and move directly to more
advanced solutions?
One commonly used leapfrogging example
is energy production: countries with low development levels should not imitate developed
countries by constructing expensive energy
infrastructure based on the use of fossil fuels.
Instead “jump” directly into a modern energy
infrastructure, enabling a wider diversity of
energy sources to be used.
OPPORTUNITIES FOR LEAPFROGGING
SLO and leapfrogging often go hand in hand.
“Mining companies often justify their investments by promising wealth, jobs and infra-
structure, but locals remain concerned about
the environment,” explains Uoti.
Technology leapfrogging may help in many
ways, but it cannot alone be the solution
where problems include the social impacts of
business activities, such as low wages, child
labor or political issues.
Could the Master Class participants find
ways to build a new kind of stakeholder dialogue? Knowing the complexity of these issues, Outotec is looking forward to fresh ideas and out-of-the-box thinking to challenge
the status quo. The value of fresh and interdisciplinary thinking on sustainability issues
has been a major factor behind our participation in this program.
SUSTAINABILITY FROM DISRUPTIONS?
The best ways to improve sustainability could
consist of strategic changes and innovations
that may be disruptive in operational terms.
The Master Class participants were therefore
assigned to think about potentially disruptive
business opportunities that could positively shake up the relatively conservative metals
and mining industry.
Disruptive business models are innovations that create new markets or make existing ways of doing business obsolete, by
being safer, more efficient or less costly, for
instance.
In Outotec’s field of business, digitalization can loosely be considered disruptive:
Plants can be operated remotely without people, and resource efficiency can be increased
About this report
by following the production process automatically in real time. This already enhances both
efficiency and operational safety. But the industry is also anticipating further benefits.
In early 2017, the program has already
continued with a science camp. It will next
move on into a phase of experimentation and
ultimately to the pitching phase, where challenge outcomes will be presented in seven-minute sessions in early April. The outcomes will be reported in our Sustainability
Report 2017.
“I have been delighted to see how well
participants have embraced these topics, and
I can’t wait to see the outcomes,” says Horn.
Challenges:
• Create a new solution (a practice or a
model) that will enable companies to earn
their social license to operate (SLO) in different contexts.
• Develop a new sustainable business model that would disrupt the mining industry
• Develop a model, practice or service that
supports or enables leapfrogging to clean
technology in the mining industry in developing countries.
The Sustainability Master Class can also be
followed through a blog published at: http://
blogs.helsinki.fi/sustainability-master-class/
Our reporting corresponds to the ‘Core’
level of the GRI G4 reporting framework,
and describes our progress in addressing
the UN Global Compact principles, as well
as our commitment to the UN Sustainable
Development Goals.
Outotec’s Sustainability Report 2016 has been
prepared according to the to the “Core” level of the GRI G4 reporting framework and the
UN Global Compact principles. However,
General Standard Disclosures as specified in
the GRI G4 guidelines are presented in a wider scope than required by the Core option.
Specific Standard Disclosures, consisting of
management approach and indicators, are
made with respect to the material aspects defined as applicable to Outotec. Indicators are
reported with a somewhat wider scope than
required by the Core option.
The reporting period is the calendar year
2016. Some information relating to developments from January to March 2017 has also
been included in the report.
This report has been verified by an independent third-party assurance provider. The
report is available in English and published
online only.
DISCLOSURE ON OUR
MANAGEMENT APPROACH
Outotec’s generic management approach to
sustainability covers all of the aspects of the
G4 framework identified as material to our
operations. We also report on our management approach with regard to specific aspects
in the relevant sections of this report. Re-
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OUTOTEC / SUSTAINABILITY REPORT 2016
spective page references are included in the
report’s GRI index.
The GRI index also shows which indicators have been used by Outotec to evaluate
our progress on the 10 principles of the Global Compact initiative, regarding human rights,
labor rights, environment principles and anti-corruption principles, as well as the related
Sustainable Development Goals.
MATERIALITY ASSESSMENT
The material aspects identified as most relevant to the company and our stakeholders by
a materiality assessment conducted in 2014
continue to form the basis for our sustainability management and reporting. As part of
the materiality assessment, we identified our
customers, employees, suppliers, investors
and financiers, the media, NGOs and local
communities as the main users of this report. In a review of key stakeholders conducted during 2016, the academic community was
added as a key stakeholder group.
REPORT COVERAGE
We report on our own operations including
Outotec’s premises and employees in full, and
partly include information on our contractors working under our supervision on project
sites, our products and services, the use of
Outotec’s technologies by customers, and our
supply chain.
Annual targets
Target for 2016
GRI indicator
& relevant SDG
Performance in 2016
Target for 2017
New lost-time incident management system implemented
globally in major locations
Partly achieved.
The system was developed and piloted in 2016 but not
implemented globally.
The lost-time incident management system to be integrated
into our existing global reporting tools
G4-LA6
Harmonized product compliance management procedures in
use globally
Partly achieved.
Harmonized procedures have been implemented in many
locations to replace previous local procedures.
Reviewed and simplified harmonized product compliance
management procedures to be implemented globally
G4-PR1
Environmental goods and services (EGS) to account for over
90% of order intake
Achieved.
EGS accounted for 90% of total order intake
EGS to account for over 90% of order intake
G4-EN27
20% reduction in CO2 emissions achieved through the use of
Outotec’s metals-related technologies, compared to industry
averages
Achieved.
27% reduction in CO2 emissions achieved through the use of
Outotec’s metals-related technologies
20% reduction in CO2 emissions to be achieved through the
use of Outotec’s metals-related technologies, compared to
industry averages
G4-EN27
Implement recently developed water recycling concepts, and
start their commercialization
Partly achieved.
Our first new water treatment solution based on
electrochemistry, which enables water recycling, was piloted
with a customer. Our offering included improved water
recycling solutions in 15 cases.
The piloting of the water treatment solution to be completed
and our offering expanded to encompass the entire water
management of a mine site.
The safety benefits of our dry stacking alternative to be
emphasized.
G4-EN27
Reductions in the use of fossil fuels by Outotec waste-toenergy plants, amounting to 60 MWe, and by steam boilers
amounting to 60 MWth
Not achieved.
Plants ordered in 2015 were under design and construction in
2016 but not yet in operation.
Reductions in the use of fossil fuels by Outotec’s renewable
energy solutions amounting to 12 MWe and/or by steam boilers
amounting to 60 MWth
G4-EN27
1. SAFETY
2. SUSTAINABLE OFFERING
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OUTOTEC / SUSTAINABILITY REPORT 2016
Target for 2016
GRI indicator
& relevant SDG
Performance in 2016
Target for 2017
Achieved.
Code of conduct reviewed and human rights perspectives
assessed.
Working conditions to be assessed at Outotec’s main
manufacturing and service sites, including Code of Conduct
training for blue-collar employees
G4-SO4
Achieved.
All major suppliers committed to Outotec’s Supplier policy.
Audits to be run globally to cover 10% of key suppliers where
a purchase order has been placed recently, for product quality,
with supplier development actions planned (or implemented)
according to the audit findings
All key suppliers not certified under ISO 14000 and/or ISO
18000 to be audited on health, safety, environmental and social
aspects
G4-EC9
G4-HR10
1% improvement in employee engagement and performance
enablement indices compared to the 2013 baseline
Not achieved.
A Pulse survey was conducted, but no improvements in
employee engagement or performance enablement indices
were recorded.
Index improvements of 6% in employee engagement and 4%
in performance enablement, compared to Pulse survey results
from 2016
G4-26
100% of employees to go through performance development
discussions (PDDs)
Partly achieved.
Due to system changes, no exact data is available for 2016.
According to the available data, PDD coverage is estimated to
be 95% of employees.
-
G4-LA11
-
2% increase in the number of female leaders in senior
leadership positions compared to 2016
G4-LA12
3. RESPONSIBLE BUSINESS PRACTICES
Review Outotec’s Code of Conduct, including its coverage and
human rights perspectives
4. SUSTAINABLE SUPPLY CHAIN
95% of major suppliers committed to Outotec’s Supplier policy
5. DEVELOPMENT OF OUR PEOPLE
6. EQUAL OPPORTUNITIES AND DIVERSITY
-
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OUTOTEC / SUSTAINABILITY REPORT 2016
Performance in 2016
Target for 2017
GRI indicator
& relevant SDG
Achieved.
A new Sustainability Master Class program, run jointly by
Outotec and the University of Helsinki, was launched.
One new community project to be started
G4-SO1
Partly achieved.
Short-term corrective actions were specified after each
round of quarterly customer surveys. Corrective actions and
communications with customers were mostly realized through
customer interfaces at local level; follow-up data not fully
available.
Continue with existing feedback surveys to measure our
performance per customer relationship and initiate a new
transactional feedback survey for field service.
G4-PR5
New energy-saving concept implemented in 5 locations
Achieved.
ISO 50001 energy management systems including saving
concepts were implemented in 4 locations in Germany. In
Finland, Outotec’s energy saving agreement was renewed, with
new targets set.
ISO 50001 energy management systems, including energy
saving concepts, to be implemented in all locations in Finland
and a new harmonized quarterly global energy consumption
reporting concept to be created and implemented.
G4-EN6
A 5% decrease in CO2 emissions from flights per EUR 1 million
sales, to be achieved by increasing virtual working methods
Achieved.
A 22% decrease in CO2 emissions from flights per EUR 1
million sales, compared to 2015.
Maintain the same lower level of CO2 emissions from flights
per EUR 1 million sales as recorded in 2016.
G4-EN19
Target for 2016
7. COMMUNITY INVOLVEMENT
One new community project started
8. STAKEHOLDER DIALOGUE
Based on customer feedback, realize corrective actions
and publicize these actions among customers, while also
communicating successes through customer cases.
9. MINIMIZE OUR OWN ENVIRONMENTAL IMPACT
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OUTOTEC / SUSTAINABILITY REPORT 2016
Outotec’s metals-related
A 22% decrease in
technologies reduce
CO2 emissions from flights
CO2 emissions by 27%
per EUR 1 million sales
Economic data
Data collection
In 2016 there were no changes in the
reporting scope because Outotec did
not make any mergers, acquisitions or
divestments. Our policy for restatements in
case of significant changes in our company
structure, or changes in the general validity
of the data, is that the data is recalculated
for previous years if the changes have led to
discrepancies of more than 10% (G4-22).
ECONOMIC DATA
The financial data in this report is based on
data collected through our enterprise resource planning and management reporting
systems. The figures used in Outotec’s consolidated financial statements have been prepared according to the International Financial
Reporting Standard. In addition, some data
has been collected manually from Microsoft
Excel spreadsheets.
ENVIRONMENTAL DATA
Performance data on environmental aspects
has been collected from our major business
units for electricity use, heating, owned or
leased company cars, flight emissions, water
use, paper use, recycled waste, and landfill
waste. Some environmental indicators have
been be recalculated for previous years, because there were significant changes in the
general validity of the data.
The report also includes information on
the combustion of fuels in company-owned
combustion sources (scope 1 emissions), and
figures on hazardous wastes, which were
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OUTOTEC / SUSTAINABILITY REPORT 2016
mainly generated in our research centers,
manufacturing workshops, and ceramic plate
production plant. A new database was employed to help us compile environmental data
on location-specific data sheets.
Data from Outotec’s project site operations was excluded from the data collection.
All the local companies from which the data
was collected are fully owned by Outotec, and
for this reason no allocations to subsidiaries
regarding the environmental indicators were
made.
Environmental data was readily available for Outotec’s largest business units. Our
smallest offices, which mainly have fewer
than 10 persons, were not able to report environmental data because they are located
in large office premises together with other
companies. They typically pay a monthly lump
sum to office space providers, and therefore
it is not possible to determine their specific
electricity, heat or water consumption.
As of 2016, environmental data has been
collected through our health and safety reporting system. Each location’s data is compiled on Microsoft Excel spreadsheets and fed
into a SAP BO database. The data is then analyzed and combined into a single file to facilitate calculations.
SOCIAL DATA
Data on our social performance was collected
applying a global master data system based
on SAP Human Capital Management. The system includes accurate data on Outotec employees globally, covering all business units
and providing basic information on all employees. Data on performance development
dialogues (PDD) is compiled from the PDD
tool based on SuccessFactor system. Changes were made to this tool in 2016, and for that
reason we could not get the exact number of
employees who conducted PDDs in 2016.
Training data covers Outotec’s global training programs and it has been compiled from different reporting systems. Data
on global training programs has been collected from a learning management system,
our e-learning platform, and local human resources personnel. Safety training data has
been collected from the health and safety reporting system. In addition, name lists
were collected in Code of Conduct class-room
trainings organized for blue-collar workers,
and the number of participants was added in
the final calculation when preparing this report. The learning management system was
renewed in 2016, which is expected to improve
the coverage and quality of our training data
as of 2017.
Outotec’s global health and safety reporting system is used for data collection and to
map out and monitor progress towards common health and safety targets in all Outotec operations. It also covers subcontractors
on construction sites. Data about employees
traveling in high-risk countries was collected
from the Travel Tracker system used as part
of our Global ISOS service.
Supply data is collected using the Global
Supplier Database and from the SIEVO spend
management software.
To collect data on human rights and compliance data, a questionnaire in the form of Microsoft Excel sheets was sent to the person responsible for human resources in each location.
Our approach to economic responsibility and
our related impacts are described in:
• Direct and indirect financial impacts, page 8
• Sustainability agenda 2020, page 13
• Impacts of megatrends on our business,
page 10
• Responsible business practices, page 24
• Building a sustainable supplier base, page 27
• Engaging with stakeholders, page 17
Our financial performance in 2016 is
described in:
• Financial Statements 2016
at www.outotec.com/investors
• Direct and indirect financial impacts, page 8
Our procurement practices are described in:
• Direct and indirect financial impacts, page 8
• Building a sustainable supplier base, page 27
Environmental data
In line with our strong focus on resource
efficiency, we strive to operate with
minimum inputs of energy and materials
and to closely monitor our consumption
of electricity, heating and water.
The bulk of Outotec’s operations involve engineering and business management in offices located in 34 countries. Our operations
also include research centers in Finland and
Germany; a Dewatering Technology Center,
two manufacturing workshops and a ceramic plate production plant in Finland; assembly
shops in Brazil, Canada, China, and the USA;
spare parts and service workshops in Qatar, United Arab Emirates, Mozambique and
South Africa; and several warehouses. Approximately 80% of Outotec’s manufacturing
is outsourced.
In 2016, Outotec did not make any acquisitions. The operations of Sinter Plant Services,
a service company we acquired in December
2015 in South Africa, have now been included
for the first time in our reporting.
The environmental impact of office work is
relatively small and is managed through our
quality, environment, health and safety (QEHS)
management system. Sustainability, pollution
prevention and sound environmental management are required in all of our operations.
We strive to operate with minimum inputs of
energy and materials, and we record our consumption of electricity, heating and water annually. Our reporting of environmental data
covers Outotec’s premises and employees as
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OUTOTEC / SUSTAINABILITY REPORT 2016
well as contractors working under our supervision at project sites.
Our management’s commitment to the
continuous improvement of our environmental performance is reflected in both ambitious target setting and results. We evaluate the environmental aspects of our offices,
research centers and manufacturing workshops, and set annual targets based on this
evaluation.
To help reduce our primary energy consumption, we are piloting an energy management system based on ISO 50001 in Germany.
Environmental criteria are taken into account
whenever we select new office premises. Outotec’s two largest offices, in Espoo, Finland,
and Oberursel, Germany, fulfill LEED® Gold
requirements. Leadership in Energy and Environmental Design (LEED) is a globally recognized green building certification program.
At our research centers, we record our
consumption of electricity and natural gas
used for test purposes on a monthly basis. We
also have local or unit-specific targets for the
energy efficiency of other operations.
Our waste management system provides
for the collection, sorting, storage and disposal of waste on our own premises. Outotec employees are instructed to separate different
types of waste for sorted collection. Where
hazardous wastes such as radioactive, flammable, explosive, toxic, corrosive or bio-hazardous materials need to be handled, specialized contractors are commissioned to dispose
of these materials safely and in line with local
legal requirements and customers’ requirements at construction sites.
MATERIALS
Materials used (G4-EN1)
The materials used globally by Outotec operations:
Materials used,
tonnes
2016
2015
2014
Paper
49.6
70.4
70.9
Steel
2,097
5,600
6,200
31
109
113
Cardboard
packaging
18.3
12.9
13.8
Plastic
packaging
3.3
1.1
1.7
Metal
packaging
1.2
1.2
1.6
238.7
210.6
230.1
Ceramics
Wood packaging
The use of paper has probably declined
due to lower business volumes and digitalization. Steel consumption has significantly
dropped since we received fewer large plant
orders and had fewer projects under construction in 2016.
We manufacture high-tech ceramics in
Turku, Finland, for use in Outotec filters. The
consumption of ceramics decreased from 2015
because of lower sales of ceramic filters.
Outotec’s Finnish workshops in Lappeenranta, Turula and Turku report the amount of
packaging they use annually to Finnish Packaging Recycling Ltd (RINKI).
ENERGY
Energy consumption within
the organization (G4-EN3)
Figures for our total global electricity and fuel
consumption from non-renewable sources
are shown in the table below. We did not consume any renewable fuels or sell any electricity, heating, cooling or steam in 2016. Figures
for energy consumption are collected globally
from our operations based on the energy-related invoicing in each location. The conversion factors between energy units are taken
from Statistics Finland. In 2016, we chose
2015 as a new base year for future comparisons since we entered into new energy saving
agreements in 2016.
Energy consumption, TJ
2016
2015
2014
Direct energy consumption:
47.8
48.5
38.8
Propane gas
10.5
11.2
7.9
Light fuel oil
0.7
0.3
0.3
Coal, coke, semi coke
0.1
0.4
0.2
Natural gas
15.9
23.5
22.7
Diesel and gasoline
20.5
13.3
5.7
117.6
116.0
116.1
Electricity (incl. cooling)*
71.4
73.7
71.8
District heating
45.2
40.8
43.2
1.0
1.5
1.1
165.5
164.5
152.9
Indirect energy consumption:
Steam
TOTAL energy consumption
*) to TJ from converted to TJ: 19,837 (2015: 20,482) MWh
All our Finnish manufacturing units and
our Pori research center remained committed to the Federation of Finnish Technology Industries’ energy efficiency agreements
for 2008-2016, aiming to save 9% in energy
consumption compared to the baseline year
2006. The total savings in energy consumption
achieved in these units amounted to 15%, as
shown in the below table. The data was collected from each location in the Motiva data
collection system used in the Finnish scheme.
The consumption figures include different
types of fuels, purchased electricity, and district heating. The conversion factors between
energy units are taken from Statistics Finland.
2016
2015
2014
38.3
33.4
38.5
9.6
14.4
9.4
18.8
18.0
18.3
1.2
2.1
1.8
13.2
13.0
11.0
3.6
3.8
5.8
Pori research center and Turula works
Energy consumption
Energy saved due to efficiency improvements,
TJ compared to base year
Lappeenranta works
Energy consumption
Turku works
Energy consumption
Energy saved due to efficiency improvements,
TJ compared to base year
Energy, TJ/EUR 1 million sales
2016
2015
2014
Energy intensity
0.16
0.14
0.11
Denominator
2016
2015
2014
Sales, EUR 1 million
1,059
1,201
1,403
The denominator for the energy intensity
calculations is:
OUTOTEC / SUSTAINABILITY REPORT 2016
Energy consumption in
Finnish units, TJ
Energy saved due to efficiency improvements,
TJ compared to base year
Energy intensity (G4-EN5)
Our energy intensity calculations include fuel,
electricity, heating, cooling and steam consumed within Outotec.
40
Reduction of energy
consumption (G4-EN6)
Our target for 2016 was to implement a new
energy-saving concept in five locations. To
reduce our primary energy consumption, we
implemented a new Energy Management System (EMS) based on ISO 50001 to be applied
in four locations in Germany. This system
was certified by TÜV Rheinland Cert GmbH
in 2016. Following the piloting of this EMS in
Germany, other Outotec locations will implement the system in the coming years. Our
Finnish units are due to be certified during
2017. In Finland, Outotec renewed its official
energy saving agreement, adding new targets.
In 2016, Outotec entered into a new energy efficiency agreement in Finland, committing to reduce the energy consumption of our
Finnish units by 4% by 2020, and 7.5% by 2025
compared to the new base year 2015.
A new energy efficiency plan was made in
Germany in 2016, including about 20 measures to be implemented during 2016-2019.
The first results will be reported in 2017.
WATER
Water withdrawal (G4-EN8)
We purchase water locally from municipal water suppliers, and channel waste water into
municipal waste water systems. The water volumes are calculated mostly based on invoices, except for certain locations in Africa that
use water from drill wells. Because our workshops are mainly assembly shops, no process
water is discharged. Outotec’s research center
in Pori uses river water for cooling purposes
in test facilities. After use, this water is channeled back to the river. We also monitor water
consumption at our premises.
Water consumption,
m3/year
emissions released by company cars, excluding vehicles used in site operations at customers’ plants. The conversion factors for the
fuel specific CO2e emissions are taken from
Statistics Finland. For the company cars, the
CO2e emissions are calculated based partly
on the reported gasoline and diesel consumption, and partly on the reports of the leasing
companies. Calculations only relate to CO2, as
we do not release emissions of other greenhouse gases.
Direct GHG emissions, tonnes of
CO2e
3,774
119
121
123
38
37
35
65,138
61,348
53,506
River water
for cooling
4,186
2,628
9,548
Company car
emissions in
Finland, g CO2e/
km
Total water
usage
69,320
63,976
63,054
Reduction from
2008, %
Direct greenhouse gas emissions
(scope 1) (G4-EN15)
Scope 1 greenhouse gas (GHG) emissions
are calculated based on the consumption of
non-renewable fuels in our locations globally, plus the carbon dioxide equivalent (CO2e)
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OUTOTEC / SUSTAINABILITY REPORT 2016
SCOPE 1 EMISSIONS, TONNES OF CO2E
5,000
4,000
3,000
2,000
1,000
0
2014
Indirect GHG
emissions,
tonnes of CO2e
2016
2015
2014
Scope 2
emissions
(purchased heat
and electricity),
location-based
7,270
7,646
8,746
Scope 2
emissions
(purchased heat
and electricity),
market-based
7,483
9,669
*
*) In 2014, the market-based and location-based
calculation methods were not applicable
4,431
2014
EMISSIONS
2014
3,910
2015
Our total water usage increased due to more
accurate reporting on consumption at locations recently acquired in Southern Africa.
2015
Scope 1
emissions (own
fuel combustion,
company cars)
2016
Drinking
water
2016
Energy indirect greenhouse gas emissions
(Scope 2) (G4-EN16)
2015
2016
In line with the Greenhouse Gas Protocol, we
used a Corporate Accounting and Reporting Standard to calculate Scope 1 and Scope
2 emissions. The calculations only relate to
CO2 as we do not release emissions of other
greenhouse gases. Country-based emission
factors were retrieved from the Protocol’s calculation tool ‘GHG emissions from purchased
electricity’. For the market-based approach,
calculations using ‘Residual mix based CO2e
emissions’ were applied for Finland, Germany
and Sweden (Source: http://www.reliable-disclosure.org/documents/, 161-RE-DISS_2014_
Residual_Mix_Results_2015-05-15_corrected2.pdf, European Residual Mixes 2014). In
terms of consolidation, the figures include
operations in which Outotec has full financial
control, i.e. our own operations and offices,
with site operations at customers’ premises
excluded.
In 2016, Outotec purchased 5,983 MWh of
CO2-free electricity from renewable energy sources in Finland and Germany. We are
gradually moving to renewable energy in our
major locations in Germany and Finland, excluding the Pori research center.
Market-based Scope 2 emissions decreased by 23%, mainly due to the increased
share of renewable energy, but also due to reduced electricity consumption. From 2016 onwards the base year will be 2015.
Other indirect greenhouse gas emissions
(Scope 3) (G4-EN17)
Other GHG emissions, tonnes of
CO2e
Scope 3
emissions (air
travel, train
journeys and
commuting)
2016
14,952
2015
21,762
2014
is CO2 from fossil fuel sources, excluding biobased CO2 emissions. From 2016 onwards the
base year will be 2015.
Supply chain
GHG emissions,
tonnes of CO2e
2016
2015
2014
360,000
345,000
386,000
22,267
SCOPE 3 EMISSIONS, TONNES OF CO2E
CO2 EMISSIONS BY SUPPLY CATEGORY
25,000
20,000
15,000
10,000
5,000
0
2014
2015
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OUTOTEC / SUSTAINABILITY REPORT 2016
Total GHG emissions, tonnes of
CO2e
2016
We report Scope 3 emissions only from our
own operations and do not include the supply
chain since project sites remain outside our
reporting scope. However, we have calculated
that the carbon footprint of our supply chain
amounts to 360,000 tonnes of CO2 equivalent (345,000), where metal products was the
biggest source of CO2 emissions, representing 27% (25%) of the total. Calculations were
based on Outotec’s spending and supply chain
emission factors as defined by the UK Department for Environment, Food and Rural Affairs
(DEFRA). The gas included in the calculations
The CO2e calculations for flight emissions
are based on guidelines produced in connection with DEFRA’s GHG Conversion Factors.
Economy class flights result in lower emissions per kilometer than business class travel.
Video conferencing systems are available
in all of our major locations. We also use teleconferences and Skype for Business for internal meetings. In 2015, Outotec took a new
set of collaboration and information sharing
tools, known as Office365, into use, which significantly increased our use of virtual meetings and reduced the need for traveling.
Outotec actively strives to use responsible
air carriers and hotels. Lufthansa and Finnair,
for instance, use relatively new fleets, which
generally produce lower emissions. In agreements with hotels, Outotec prefers hotels with
favorable social responsibility policies.
2016
2015
2014
Total GHG
emissions,
location-based
26,131
33,839
34,768
Total GHG
emissions,
market-based
26,344
35,862
*
*) In 2014, the market-based and location-based
Within Scope 3, emissions from air travel
are the biggest single source at Outotec (G4EN30). These emissions decreased by 31%
in 2016, due to a decline of 27% in the total
length of business-related flights and because our personnel increasingly traveled in
economy class on long-haul flights.
calculation methods were not applicable
GHG emissions intensity (G4-EN18)
Tonnes of CO2e/
EUR 1 million
sales
2016
2015
2014
Relative flight
emissions
12.8
16.4
14.6
Relative total
GHG emissions,
market- based
24.7
28.2
24.8
Relative total
GHG emissions,
based on
country-specific
electricity mixes
in Finland and
Germany
24.9
28.9
*
*) In 2014, the market-based and location-based
calculation methods were not applicable
Total waste produced, tonnes
Our relative flight emissions per one million
euro sales decreased by 22% from 2015. Our
target for 2016 was to achieve a 5% decrease
in CO2 emissions from flights per EUR 1 million sales, by favoring virtual ways of working. The relative reduction was, how­ever,
smaller than the actual reduction of Scope 3
emissions because Outotec’s sales in 2016
decreased by 12%. The gas included in the
calculations is CO2 from fossil fuel sources,
excluding bio-based CO2 emissions.
The overall positive impact of Outotec’s
business travel can be best illustrated by
comparing our total annual GHG emissions
in 2016 (market-based), which were 26,344
tonnes CO2e (2015: 35,862), with the emissions avoided by using seven of our key technologies, which amounted to 5,870,000 tonnes
of CO2e (5,469,000).
Emissions avoided by technology,
tonnes of CO2e
Emissions avoided
WASTE
Waste handling is not centrally managed at
Outotec. We have instructed our locations to
sort waste according to local regulations and
the guidelines provided by facility owners.
Emissions avoided, thousand
tonnes of CO2e
GHG emissions
avoided through
the use of
seven Outotec
technologies
2016
5,870
2015
5,469
(6,600)*
2014
5,067
(5,900)*
4,000
2,500
3,000
2,000
2,000
1,500
1,000
1,000
0
500
2014
2015
2016
Total weight of waste by type and disposal
method (G4-EN23)
Waste, tonnes
2016
2015
2014
*) Updated calculations included seven Outotec tech-
Waste recycled
766
1,013
1,346
nologies: Copper flash smelting, Ferrochrome process,
Coated titania anodes and TankCell 300 flotation cells.
Landfill waste
and incinerated
waste
597
1,484
1,482
In early 2017, Outotec purchased a new database for
Hazardous waste
42
261*
98
1,405
2,758
2,926
97
120
151
Alumina calcination, Ceramic filters, Co-generation,
industrial data, according to which the baseline had
changed, and we consequently recalculated the figures
for 2015 and 2014. Our policy is to recalculate previous
years’ data when discrepancies exceed 10%.
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OUTOTEC / SUSTAINABILITY REPORT 2016
Total waste
Paper recycled
*) A large amount of hazardous waste was removed
from a workshop acquired in Mozambique.
2014
2015
2016
Waste amounts declined significantly because
of lower sales volumes and the reduced number of employees.
No significant spills were reported in
Outotec operations and project sites in 2016
(G4-EN24).
A small amount of hazardous waste is
produced in the final surface treatment of filter presses in our Lappeenranta works. In
addition, oily waste from lubricants used in
the Turula works is classified as hazardous.
These hazardous wastes are sent to local
hazardous waste treatment facilities.
For more information see:
• Initiatives to mitigate the environmental impacts of our products and services,
page 22
• Grievances and non-compliance with
environmental laws and regulations, in
Responsible business practices, page 24
OUR POLICIES
• Quality, Environment, Health and Safety
(QEHS) Policy
• Travel Policy
Social data
Our commitment to the United Nations’
Global Compact’s principles on human
rights, environment, labor, and anticorruption, and our recognition of the
UN’s Guiding Principles on Business and
Human Rights demonstrate our desire to
further advance social responsibility in our
business.
Our approach to social responsibility is
described in connection with our material
themes:
• Safety
• Responsible business practices
• Development of our people
• Equal opportunities and diversity
• Stakeholder dialogue
• Community involvement
EMPLOYEES
Outotec had 4,340 employees on average
in 2016 (G4-10). At the end of 2016, Outotec
had 667 employees fewer than the previous
year-end, due to cost saving actions, related redundancies and job terminations. Our
temporary personnel have at the same time
been reduced to about five per cent of the total payroll, and the number of full-time equivalent contracted persons working in project
execution and services was reduced to 330.
We could not report the share of part-time
employees of the total workforce because the
information has not been included in our HR
master data system. Some of the temporary
employees are self-employed, typically retired
Outotec experts who work for shorter periods
44
OUTOTEC / SUSTAINABILITY REPORT 2016
on customer projects. During annual vacation
seasons, we hire students as trainees.
In addition to employees, Outotec had
330 (2015: 405) full-time equivalent contracted persons working under our supervision.
These contractors are not reported in the employee data.
Employees by
employment type
2016
2015
2014
Employees at
year end
4,192
4,859
4,571
Employees on
average
4,340
4,855
4,776
Permanent
employees
Employees by region
Employees by
region
2016
2015
2014
EMEA
2,824
3,159
2,627
Americas
801
1,012
1,214
APAC
577
688
730
Total
4,192
4,855
4,859
Employees by gender
3,978
4,534
4,187
5
8
8
Temporary
employees, as %
of total
n = 4,192 (2015: 4,859), coverage 100%
Employees by category
Employees by
gender, %
2016
2015
2014
Share of
women among
employees
18.7
18.4
18.8
Share of
men among
employees
81.3
81.6
81.2
Share of
women among
management*
13.2
13.3
13.1
Share of
men among
management*
86.8
86.7
86.9
*) n = 1,264 management-level employees, according to
Outotec grading
Average age of employees
Senior management 6%
Middle management 24%
Specialists 53%
Blue-collar workers 17 %
2016
2015
2014
42.0
41.3
41.0
LABOR PRACTICES AND DECENT WORK
Employee turnover rate
by region
Total number and rates of new employee
hires and employee turnover by age group,
gender and region (G4-LA1)
New employee hires by gender
2016
2016
2015
2015
2014
2014
#
%
#
%
#
%
181
14
132
9
120
9
Germany
47
9
68
12
42
8
Rest of Europe
86
26
72
19
133
35
The Americas
367
46
324
32
216
18
70
19
74
18
70
15
228
27
128
13
89
14
Finland
2016
2016
2015
2015
2014
2014
#
%
#
%
#
%
Women
101
16
169
18
N/A*
N/A*
Men
545
84
783
82
N/A*
N/A*
Australia
Rest of the world
*) data is not available due to system change
Employee turnover rate
by age group
2016
2016
2015
2015
2014
2014
#
%
#
%
#
%
68
48
68
27
66
24
26–30
138
27
101
16
104
16
31–35
174
22
121
14
118
14
36–40
133
19
144
19
92
13
41–45
137
23
109
16
76
13
46–50
94
19
82
15
67
13
51–55
86
19
85
17
41
9
56–60
59
19
39
12
33
10
>60
86
43
49
20
71
31
979
23
798
16
668
15
2016
2016
2015
2015
2014
2014
#
%
#
%
#
%
<25
Total
Employee turnover rate
by gender
Women
164
21
147
16
127*
15
Men
815
24
651
16
543*
15
45
OUTOTEC / SUSTAINABILITY REPORT 2016
The higher employee turnover in 2016
compared to 2015 is partly the result of personnel reductions due to cost saving programs.
Approximately 50% of our employees are
covered by collective bargaining agreements.
Binding collective agreements are followed in
each country where they are applicable to Outotec employees.
COMPENSATION
Total compensation paid out to employees by
Outotec in 2016 amounted to EUR 329 million
(353). Outotec’s compensation policy is described on www.outotec.com/cg.
142 key employees were part of the company’s share-based incentive program in
2016 (168). In addition, 933 (1,211) employees
equaling 27% (27%) of eligible personnel participated in our employee share savings plan.
This plan was not offered to employees in Mozambique, Morocco, Qatar, and Saudi Arabia,
due to legal restrictions or because operations were only acquired during the year. In
May 2016, Outotec paid out a total of 233,160
shares and cash payments to cover estimated
taxes to 1,417 employees who participated in
the employee share savings plan in 2013.
Outotec runs several pension plans in
various countries. These plans are mainly
classified as legally defined contribution pension plans. Other post-employment benefits
include medical arrangements for retired employees in Germany
Compensation
2016
2015
2014
Wages and
salaries paid,
EUR million
329.1
353.4
362.8
Ratio of
annual total
compensation of
CEO to median
compensation of
employees
7.9*
10.3
9.7
Change in
annual total
compensation of
CEO, %
-20.2*
-2.9
-40.9
Change in
annual median
compensation of
employees, %
4.2
-2.9
4.4
n = 4,192 (2015: 4,859), coverage 100 %
*) In 2016, Outotec’s CEO changed and the compensation covers three different CEOs, one of them acting.
CEO’s compensation does not include severance payment, compensation for unused vacation, salary for
notice period or relocation costs due to the change of
CEO.
Benefits provided to full-time employees
in 2016 (G4-LA2)
Injury rates and types, occupational diseases, lost days, absenteeism, and work-related fatalities (G4-LA6)
Benefits provided to full-time employees,
but not provided to temporary, %
FT = Full-time, TEMP = Temporary
EMEA
Americas
APAC
Total
FT
TEMP
FT
TEMP
FT
TEMP
FT
TEMP
Life insurance
70
42
100
38
0
0
67
36
Health care
84
65
100
38
7
7
77
53
Disability/invalidity coverage
93
64
100
38
20
0
85
52
100
95
100
38
100
0
99
75
Retirement provision
36
0
100
38
36
0
49
4
Stock ownership
96
0
100
0
64
0
93
0
2,634
149
780
21
521
29
3,935
199
99
98
100
100
97
71
99
93
Maternity/paternity leave
n=
coverage
Minimum notice periods for significant
operational changes
The minimum notice periods that must be
observed in advance of significant operational changes depend on locations and national
legislation, and therefore differ significantly.
Notice periods range from two weeks to one
year (G4-LA4).
OCCUPATIONAL HEALTH AND SAFETY
The reporting of health and safety covers Outotec’s premises and employees, contractors
working under our supervision and our project sites.
46
OUTOTEC / SUSTAINABILITY REPORT 2016
The entire workforce (100%) is represented in formal joint management-worker health
and safety committees that help to monitor
and provide advice on occupational health and
safety programs (G4-LA5). Units that have
less than 10 people are represented in the
health and safety committees of the closest
larger units.
We have found out that there are cultural
differences and variation in the categorization
between lost time injuries and total recordable injuries in certain countries. To improve
transparency we have also reported total recordable injury rates (TRIR) for 2016.
Type of injury and rates of injury, occupational diseases,
lost days and absenteeism, and total number of work-related fatalities
2016
2015
2014
23
41
33
0
0
0
1.8
2.8
1.5
1
0
0
Occupational disease rate (per 1 million working hours)
0.0
0
0
Lost days because of occupational accidents or disease
304
512
173
Lost day rate (per 1 million working hours)
24.5
35.1
7.6
1.8
1.2
0.9
Non-fatal injuries arising from or in the course of work
Fatal injuries arising from or in the course of work
Lost-time injury rate (LTIR –per 1 million working hours)
Occupational diseases
Absentee rate, %
n = 6,450 (7,157) including Outotec’s employees and subcontractors working under our control on project sites
Total recordable injury rate (TRIR) by region
in 2016 (G4-LA6)
Market area
LTIR
TRIR
North & Central America
1.3
8.0
South America
0.8
1.2
Europe & North Africa
1.9
6.9
0
4.7
4.7
10.4
0
1.4
China
15.1
18.9
SEAP
0.8
6.7
Outotec total
1.8
5.7
Eurasia
Sub-Saharan Africa
Middle East and India
Read about workers with high incidence
or high risk of diseases related to their occupation in Safety, page 20.
Health and safety topics are not covered
in formal agreements with trade unions (G4LA8) since they are duly addressed by statutory regulations and laws that Outotec complies
with.
TRAINING AND EDUCATION
Our reporting of training hours covers Outotec’s employees. Our learning management
system provides information of Outotec’s
global training programs excluding blue-collar workers. Training hours on health and
safety are compiled from the health and safety reporting system. Average hours of training per year by gender and employee category
Hours
2,444
1,301
12,612
31,788
27,521
Training or education pursued externally and paid
for in whole or in part by Outotec
Number of
employees
Hours
500*
500*
807
2,850*
3,000*
6,877
55,986
93,843
60,365
MEN 85%
WOMEN 15%
Vocational training employee category
in 2016
Hours
Total training
hours
Number of
employees
All types of
training hours/
employee
954
1,104
673
1,431
3,139
76,500
95,499
131,380
4,192
4,859
4,571
19.7
28.7
*) Training on MS Office365 tools started in
December 2015.
**) Human rights issues were covered in Code of Conduct e-learning and classroom training. In 2016 the
number of hours of training declined, even though
more employees underwent training, because in previous years there were more classroom training sessions
with a longer duration than e-learning sessions.
47
0
0
30-50 years old
25
31
57
> 50 years old
75
69
43
0
0
0
30-50 years old
56
59
60
> 50 years old
44
41
40
1
3
2
30-50 years old
66
64
66
> 50 years old
33
33
32
< 30 years old
26
22
19
30-50 years old
70
59
61
> 50 years old
23
19
20
< 30 years old
28
30
31
30-50 years old
54
54
52
> 50 years old
19
16
15
0
0
0
100
Senior management, %
< 30 years old
< 30 years old
Specialists, %
1,223
18.3
0
Middle management, %
Training on human rights issues**
Number of
employees
2014
< 30 years old
Training on health and safety
Hours
2015
OUTOTEC / SUSTAINABILITY REPORT 2016
Senior management 22%
Middle management 32%
Specialists 46%
Blue-collar workers 0%
Read about programs for skills management and lifelong learning that support the
continued employability of employees and assist them in managing career endings (G4LA10) on page 28.
Read about percentage of employees receiving regular performance and career development reviews, by gender and by employee category (G4-LA11) on page 29.
Blue-collar workers, %
Board of Directors, %
< 30 years old
30-50 years old
25
0
0
> 50 years old
75
100
100
n = 4,192, coverage 100%
80
60
40
20
0
WOMEN
MEN
2014
2,391
2016
Executive Board, %
Vocational training and instruction
Number of
employees
Share of women by employee category, %
WOMEN
MEN
Employees by
age group
WOMEN
MEN
2015
Composition of governance bodies and breakdown of employees per category according to
gender, age group, minority group membership, and other indicators of diversity (G4-LA12)
WOMEN
MEN
2016
DIVERSITY AND EQUAL OPPORTUNITY
WOMEN
MEN
Training
Vocational training by gender in 2016
WOMEN
MEN
(G4-LA9) is partly reported. It includes vocational training only due to different data management systems in other types of training.
For health and safety training, externally pursued training and Code of Conduct classroom
training, the information of gender and employee category has not been collected.
Board of Directors by gender %
Executive Board by gender %
Senior management by gender %
Middle management by gender %
Specialists by gender%
Blue collar workers by gender%
The share of men in the mining and metallurgical industry has traditionally been high
which partly explains the current low share of
women.
When Outotec starts a new operation in a
new country, an expatriate employee is typically assigned to integrate the new operation
into Outotec. Our goal is nevertheless that
senior management should be hired locally.
In 2016, 50% (63%) of our market areas had
local leaders. The decrease is due to the fact
that a permanent leader for one market area
has not yet been appointed and the position is
temporarily held by an expatriate.
SUPPLIERS
Outotec had approximately 3,300 (3,400) active direct suppliers in 2016. Our total spend
on customer-related purchasing in 2016 was
EUR 486 million (629 million). The total spend
decreased as the company’s order intake and
sales declined due to the weaker market situation.
The share of indirect spend decreased in
2016 because external services were used
less than in the previous year, in line with our
cost saving program.
Our spending on local suppliers in 2016
amounted to EUR 310 million (EUR 270 million), equivalent to 64% of our total supply
spend (G4-EC9). The largest shares by country – each amounting to EUR 10–50 million –
were spent in the USA, China, Australia, the
UAE, Sweden, South Africa, Mexico, Chile, and
the UK. The remaining local spend was distributed among 45 countries.
48
OUTOTEC / SUSTAINABILITY REPORT 2016
Supply spend by category
For more information, see also:
• Building a sustainable supplier base, page 27
• Responsible business practices, page 24
• Safe products for our customers, page 21
• Sustainable offering for customers, page 22
• Surveys measuring customer satisfaction,
page 17
GRI, GLOBAL COMPACT,
AND SDG CONTENT INDEX
Based on our own assessment, Outotec has
declared this report to be compliant with
the GRI G4 guidelines in accordance with
the core level. Compliance has additionally
been checked by a third party, Ecobio Ltd.
In our sustainability reporting for 2016, we
have applied the Global Reporting Initiative
(GRI) G4 Guidelines’ specific standard disclosure indicators, as presented in the table
below. The table also indicates our progress
on the United Nations’ Global Compact principles and Sustainable Development Goals
(SDG).
Code
Description
Related webpage and omissions
General Standard Disclosure
Strategy and analysis
G4-1
CEO’s statement
CEO’s message, p. 3
Organizational profile
G4-3
Name of the organization
This is Outotec, p. 5
G4-4
Primary brands, products, and/or services
This is Outotec, p. 5
G4-5
Location of organization’s headquarters
This is Outotec, p. 5
G4-6
Number of countries where the organization operates
This is Outotec, p. 5
G4-7
Nature of ownership and legal form
This is Outotec, p. 5
G4-8
Markets served
This is Outotec, p. 5
G4-9
Scale of the reporting organization
This is Outotec, p. 5
Direct and indirect financial impacts, p. 8
G4-10
Breakdown of workforce
Social data, p. 8
6
G4-11
Coverage of collective bargaining agreements
Social data, p. 44
3
G4-12
Organisation’s supply chain
Building a sustainable supply chain, p. 27
G4-13
Significant changes during the reporting period regarding
size, structure, or ownership
This is Outotec, p. 5
Data collection, p. 38
G4-14
Precautionary approach or principle
Responsible business practices, p. 24
G4-15
Externally developed sustainability charters, principles or other
initiatives which the organization endorses
Commitment to external initiatives
at www.outotec.com
G4-16
Memberships of associations
Commitment to external initiatives at www.outotec.com
Identified material aspects and boundaries
49
OUTOTEC / SUSTAINABILITY REPORT 2016
Global compact
principle
G4-17
All entities included in the organization’s consolidated financial
statements
Financial Statements 2016 at www.outotec.com/investors
G4-18
Process for defining report content and the aspect boundaries
Most significant topics, p. 12
Engaging with stakeholders, p. 17
G4-19
Material aspects
Most significant topics, p. 12
G4-20
Aspect boundary within the organisation
About this report, p. 34
Most significant topics, p. 12
G4-21
Aspect boundary outside the organization
About this report, p. 34
Most significant topics, p. 12
The carbon footprint of our supply chain, p. 42
G4-22
Explanation of re-statements
Data collection, p. 38
G4-23
Significant changes from previous reporting periods in the scope
and aspect boundaries
This is Outotec, p. 5
About this report, p. 34
SDG
Code
Description
Related webpage and omissions
Global compact
principle
Stakeholder engagement
G4-24-27 Stakeholder engagement
Engaging with stakeholders, p. 17
OWN
Enhancing employee engagement, p. 28
Employee engagement and performance enablement indices
Report profile
G4-28-31 Report profile
About this report, p. 34
G4-32
‘In accordance’ option chosen
About this report, p. 34
G4-33
External assurance
Independent assurance, p. 55
Governance
Governance structure and composition
G4-34
Governance structure
Responsible business practices, p. 24
Ethics and integrity
G4-56
Organization’s values, principles and codes
Values at www.outotec.com
Responsible business practices, p. 24
10
DISCLOSURES ON MANAGEMENT APPROACH
DMA
Management approach
Responsible business practices, p. 24
ECONOMIC RESPONSIBILITY
DMA
Management approach to economic responsibility
Direct and indirect financial impacts, p. 8
Economic performance
G4-EC1
Direct economic value generated and distributed
Direct and indirect financial impacts, p. 8
G4-EC2
Risks and opportunities due to climate change
Impacts of megatrends on our business, p. 10
Partly reported, taxes by country not reported.
7
Indirect economic impacts
G4-EC8
Significant indirect economic impacts
Direct and indirect financial impacts, p. 8
Procurement practices
G4-EC9
Proportion of spending on local suppliers at significant locations
of operation
Building a sustainable supplier base, p. 27
Direct and indirect financial impacts, p. 8
ENVIRONMENTAL RESPONSIBILITY
DMA
Management approach to environmental responsibility
Environmental data, p. 39
Materials
G4-EN1
50
OUTOTEC / SUSTAINABILITY REPORT 2016
Materials used
Environmental data, p. 39
7,8
SDG
Code
Description
Related webpage and omissions
Global compact
principle
Energy
G4-EN3
Energy consumption within the organization
Environmental data, p. 40
7,8
G4-EN5
Energy intensity
Environmental data, p. 40
8
G4-EN6
Reduction of energy consumption
Environmental data, p. 40
8,9
Environmental data, p. 41
7,8
Water
G4-EN8
Water withdrawal
Emissions
G4EN15–
G4-EN17
Greenhouse gas emissions (Scope 1, 2, 3)
Environmental data, p. 41-42
Building a sustainable supplier base, p. 27
7,8
G4-EN18
Greenhouse gas emissions intensity
Environmental data, p. 42
8
Effluents and waste
G4-EN23
Waste by type and disposal method
Environmental data, p. 43
8
G4-EN24
Total number and volume of significant spills
Environmental data, p. 43
8
7,8,9
Products and services
G4-EN27
Extent of impact mitigation of environmental impacts of
products and services
Sustainability agenda 2020, p. 13
Sustainable offering for customers, p. 22
Safe products for our customers, p. 21
OWN
Environmental Goods and Services in order intake
Sustainability agenda 2020, p. 13
Sustainable offering for customers, p. 22
OWN
Percentage of CO2 emissions avoided through the use of Outotec’s Sustainability agenda 2020, p. 13
metals-related technologies
Environmental data, p. 43
OWN
Percentage of reduction of fresh water/tonne of ore
by non-ferrous metals concentrators using Outotec technology
Sustainability agenda 2020, p. 13
Sustainable offering for customers, p. 22
OWN
Increase of energy produced using Outotec
waste-to-energy solutions
Sustainable offering for customers, p. 22
Sustainability agenda 2020, p. 13
Compliance
51
OUTOTEC / SUSTAINABILITY REPORT 2016
G4-EN29
Compliance with environmental laws
Responsible business practices, p. 24
G4-EN30
Significant environmental impacts of transporting products/
workforce
Environmental data, p. 41
8
SDG
Code
Description
Related webpage and omissions
Global compact
principle
Supplier environment
G4-EN32
Percentage of new suppliers that were screened using
environmental criteria
Building a sustainable supplier base, p. 27
8
G4-EN33
Significant actual and potential negative environmental
impacts in the supply chain
CO2 emissions of our supply chain, p. 42
8
Responsible business practices, p. 24
8
Environmental grievance mechanisms
G4-EN34
Number of grievances about environmental impacts
SOCIAL RESPONSIBILITY
DMA
Management approach to social responsibility
Social data, p. 44
Labor practices and decent work
Employment
G4-LA1
Total number and rates of new employee hires and employee
turnover by age group, gender and region
Social data, p. 44
G4-LA2
Benefits provided to full-time employees that are not provided to
temporary or part-time employees
Social data, p. 46
Labor / management relations
G4-LA4
Minimum notice period(s) regarding significant
operational changes
Social data, p. 46
3
Occupational health and safety
G4-LA5
Percentage of total workforce represented in formal joint
management-worker health and safety committees that
help monitor and advise on occupational health and safety
programs
Safety, p. 20
G4-LA6
Rates of injury, occupational diseases, lost days and absenteeism, Social data, p. 46
and total number of work-related fatalities by region
G4-LA7
Workers with high incidence or high risk of diseases
related to occupation
Safety, p. 20
G4-LA8
Health and safety topics covered in formal
agreements with trade unions
Social data, p. 46
1
Training and education
52
OUTOTEC / SUSTAINABILITY REPORT 2016
G4-LA9
Average hours of training per year per employee category
Social data, p. 47
Partly reported, data does not cover
blue-collar workers and classroom trainings
6
G4-LA10
Programs for skills management and lifelong learning
Enhancing employee engagement, p. 28
1
G4-LA11
ercentage of employees receiving regular performance and
career development reviews
Enhancing employee engagement, p. 28
6
SDG
Code
Description
Related webpage and omissions
Global compact
principle
Diversity and equal opportunity
G4-LA12
Composition of governance bodies and breakdown of employees
per category according to gender, age group, minority group
membership, and other indicators of diversity
Social data, p. 47
Supplier assessment for labor practices
G4-LA14
Percentage of new suppliers that were screened using labor
practices criteria
G4-LA15
Significant actual and potential negative impacts for labor
practices in the supply chain and actions taken
Building a sustainable supplier base, p. 27
Labor practices grievance mechanisms
G4-LA16
Number of grievances about labor practices
Responsible business practices, p. 24
Enhancing employee engagement, p. 28
Human rights
Non-discrimination
G4-HR3
Total number of incidents of discrimination
and actions taken
Responsible business practices, p. 24
6
Freedom of association
G4-HR4
Operations and suppliers identified in which the right to exercise Building a sustainable supplier base, p. 27
freedom of association and collective bargaining may be at signifi- Responsible business practices, p. 24
cant risk
3
Child labor
G4-HR5
Operations and suppliers identified as having significant
risk for incidents of child labor
Building a sustainable supplier base, p. 27
5
Building a sustainable supplier base, p. 27
4
Forced or compulsory labor
G4-HR6
Operations and suppliers identified as having significant
risk for incidents of forced or compulsory labor
Supplier human rights
G4-HR10
Percentage of new suppliers that were screened
using human rights criteria
Building a sustainable supplier base, p. 27
2
G4-HR11
Significant actual and potential negative human rights
impacts in the supply chain
Building a sustainable supplier base, p. 27
2
Responsible business practices, p. 24
1
Engaging with stakeholders, p. 17
Partly reported, impact assessments and development
plans are missing
1
Human rights grievance mechanisms
G4-HR12
Number of grievances about human rights impacts
Society
Local communities
G4-SO1
53
OUTOTEC / SUSTAINABILITY REPORT 2016
Local community engagement, impact assessments,
and development programs.
SDG
Code
Description
Related page and omissions
Global compact
principle
G4-SO2
Operations with significant negative impacts
on local communities
Responsible business practices, p. 24
1
Anti-corruption
G4-SO3
Total number and percentage of operations assessed
for risks related to corruption
Responsible business practices, p. 24
10
G4-SO4
Communication and anti-corruption training
Responsible business practices, p. 24
10
G4-SO5
Confirmed incidents of corruption and actions taken
Responsible business practices, p. 24
10
Anti-competitive behaviour
G4-SO7
Total number of legal actions for anti-competitive behavior,
anti-trust, and monopoly practices
Responsible business practices, p. 24
Compliance
G4-SO8
Monetary value of significant fines and total number of non-mon- Responsible business practices, p. 24
etary sanctions for non-compliance with laws and regulations
Supplier assessment for impacts on society
G4-SO9
Percentage of new suppliers that were screened using
criteria for impacts on society
Building a sustainable supplier base, p. 27
G4-SO10
Significant actual and potential negative impacts
on society in the supply chain
Building a sustainable supplier base, p. 27
Grievance mechanisms for impacts on society
G4-SO11
Number of grievances about impacts on society
Responsible business practices, p. 24
Product responsibility
Customer health and safety
G4-PR1
Percentage of significant product and service categories for
which health and safety impacts are assessed for improvement
G4-PR2
Total number of incidents of non-compliance with regulations and Safe products for our customers, p. 21
voluntary codes concerning the health and safety impacts
of products and services
Safe products for our customers, p. 21
Annual targets, p. 35
Product and service labeling
G4-PR5
Results of surveys measuring customer satisfaction
Compliance
G4-PR9
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OUTOTEC / SUSTAINABILITY REPORT 2016
Monetary value of significant fines for non-compliance with laws Responsible business practices, p. 24
and regulations concerning the provision and use of products and
services
SDG
Independent Assurance Report –
Outotec Sustainability Report 2016
TO THE MANAGEMENT OF OUTOTEC OYJ
Insinööritoimisto Ecobio Oy (hereafter Ecobio)
has been commissioned by Outotec Oyj (hereafter Outotec) to perform a limited third party
assurance engagement regarding the content
of Outotec’s Sustainability Report for 2016.
OUTOTEC’S RESPONSIBILITY
Outotec was responsible for the collection,
preparation and presentation of the information in the Sustainability Report (hereafter
Sustainability Information) according to the
Sustainability Reporting Guidelines (GRI G4)
set up by the Global Reporting Initiative (GRI).
Ecobio, as an independent assuror was not
involved in the data gathering and preparation
of the Sustainability Information, apart from
the Independent Assurance. The Management
of Outotec has approved the information provided in the Sustainability Report.
PRACTITIONER’S RESPONSIBILITY
Ecobio’s responsibility was to present a conclusion on the Sustainability Information subject to the assurance performed by Ecobio.
The scope of work included assurance of
completeness and correctness of information presented by Outotec in the Sustainability
Report 2016. The assurance engagement was
limited to the non-financial performance data
disclosed in the Sustainability Report for the
reporting period of January 1st 2016 to December 31st 2016.
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OUTOTEC / SUSTAINABILITY REPORT 2016
The Sustainability Information assured
covered the Standard Disclosures in accordance with the core-level option, including the
reported Environmental and Social Performance Indicators. In addition, the level of the
consistency of the Economic Performance
Indicators reported was checked against the
GRI G4 Sustainability Reporting Guidelines.
Ecobio disclaims any liability or responsibility for any third party decision based upon
this assurance report.
METHODOLOGY
Ecobio based the assurance process on the
following guidelines and standards: the Global Reporting Initiative Sustainability Reporting Guidelines GRI G4, the International Standard on Assurance Engagements (ISAE) 3000
(Revised) Assurance Engagements Other than
Audits or Reviews of Historical Financial Information and Outotec’s internal reporting
guidelines. The assurance process was performed utilizing Ecobio’s internally developed
GRI assurance tool, covering the principles,
standard disclosures and indicators of the GRI
G4 Guidelines. The Standard Disclosures were
assessed based on a sampling plan composed by Ecobio.
Concerning limited assurance engagement the evidence-gathering procedures are
more limited than for a reasonable assurance engagement, and therefore less assurance is obtained. This assurance engagement
was conducted from December 2016 to March
2017. The assurance process included:
• Interviewing employees responsible for
data collection and reporting at Outotec’s
group level.
• Evaluating procedures for gathering,
analyzing, and aggregating quantitative
data for the Sustainability Report 2016
as well as performing cross-checks on
a sample basis concerning the reported
sustainability data.
• Checking the internal guidelines of
the data collection.
• Checking the sufficiency of the
documentation of the data gathering
process.
• Checking the consistency of the
Sustainability Report 2016 compared
to the GRI G4 Sustainability Reporting
Guidelines.
CONCLUSIONS
Based on the work described in this report, nothing has come to our attention that
would cause us to believe that the information presented in Outotec’s Sustainability Report 2016 is not fairly stated, in all material
respects, or that it would not comply with the
Reporting Criteria stated before.
OBSERVATIONS AND RECOMMENDATIONS
Based on our limited assurance engagement
we provide the following observations and
recommendations related to GRI Sustainability Reporting principles. These observations
and recommendations do not affect the conclusions presented earlier.
• In general, the report is comprehensive,
well-structured and claims are reported
in a clear and reasonable fashion.
• Outotec presents a good understanding of
sustainable development conditions and
the reported strategy and performance
relate to the understanding of these
conditions.
• The materiality assessment is
comprehensive taking into account
different dimensions of sustainability. The
process for defining the report content
could though be described more in detail.
• All relevant topics are covered in the
report and a shift to a more focused
content has been made for the 2016
report. However, if omissions are made
they should be clearly stated and
preferably on indicator level.
• Stakeholder dialogue is active and
relevant topics are well identified. We
recommend keeping an active dialogue
with stakeholders to maintain a high level
on inclusivity in future reporting periods
and to ensure that also future reports
responds to stakeholder expectations
and interests. The report could also
support the interactivity between
stakeholders and the reporting
organization more by offering means to be
in contact with the organization.
• Outotec has made further progress on
including the whole value chain within the
reporting boundary, which is consistent
with the work done during previous
reporting periods. This could still be
enhanced to even more comprehensively
cover impacts outside the organization,
as most of the impacts are identified to
happen there. This would improve the
completeness of the report.
• The documentation of the work processes
and the internal guidelines for data
gathering has been further improved.
This is of importance as to maintain
consistency in data gathering and
compilation as well as accuracy and
reliability in the reporting over time also
when organizational changes occur.
As an independent consultancy, Ecobio
has no financial dependencies on Outotec beyond the scope of this engagement. Ecobio
has conducted this assurance independently,
and there has been no conflict of interest.
PRACTITIONER’S INDEPENDENCE
AND QUALIFICATIONS
Ecobio is an independent consulting company that specializes in environmental, health
and safety management with over 25 years of
history. Ecobio provides corporate sustainability and environmental consultancy services,
combined with training, modelling, research
and planning, for companies in the infrastructure, industry and service sectors. Ecobio’s
assurers are skilled and experienced within non-financial assurance and have good
knowledge of industry related sustainability
issues.
Thomas Andersson
Senior Consultant (M.Sc.)
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OUTOTEC / SUSTAINABILITY REPORT 2016
Helsinki, 27th of March 2017
Insinööritoimisto Ecobio Oy
Taru Halla
Managing Director (M.Sc.)
CONTACT INFORMATION
Tea Maasalo
Director - Corporate Responsibility
[email protected]
Eila Paatela
Vice President - Corporate Communications
[email protected]
Saija Kinanen
Communications Manager
[email protected]
www.outotec.com/sustainability
www.facebook.com/Outotec
www.linkedin.com/company/Outotec
www.twitter.com/Outotec
www.youtube.com/user/OutotecOyj
Outotec Oyj
PO Box 1000
FI-02231 Espoo
Finland
Tel. +358 20 529 211
Outotec provides leading technologies and services for the sustainable use of Earth’s natural resources.
As the global leader in minerals and metals processing technology, we have developed many breakthrough
technologies over the decades for our customers in metals and mining industry. We also provide innovative
solutions for industrial water treatment, the utilization of alternative energy sources and the chemical
industry. Outotec shares are listed on NASDAQ Helsinki. www.outotec.com
Copyright © 2017 Outotec Oyj. All rights reserved.